Is this the next ASX 200 company to unveil a M&A deal?

The macroeconomic environment may be volatile but that isn't likely to quell appetite for mergers and acquisitions (M&A) among S&P/ASX 200 (Index:^AXJO) (ASX:XJO) stocks.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Qube Holdings Ltd (ASX: QUB) share price and Chalmers Limited (ASX: CHR) share price will be in the spotlight this morning on reports that Qube is planning on mounting a bid for the small cap trucking company.

If the report is on the money, the acquisition would be Qube's second merger and acquisition (M&A) foray this calendar year with the port and logistics group taking over mining and industrial services company LCR Group in a $135 million deal.

The speculation is that Qube is running the ruler over Lindsay Fox-backed Chalmers and plans to put an offer on the table, according to the Australian Financial Review which didn't reveal the source of the information.

Details of the potential M&A

The acquisition should be fairly easy for Qube to swallow as Chalmers has a market cap of around $35 million and Qube reported a cash balance of $107 million at the end of 2018.

It's acquisition of LCR was funding through existing debt facilities and that means it should still have enough cash in the kitty to pay an appropriate premium for Chalmers (assuming it's an all cash bid). The speculation is that Qube is willing to cough up a 40% plus premium to control Chalmers.

The deals show that Qube is looking to spread its eggs out and diversify from its key Moorebank intermodal hub in Sydney – which is a key strategic asset for the group given its location at the supply chain crossroads between port, rail and road.

Chalmers is located in a purpose-built facility in the Brisbane port precinct and had moved there after a long history of operating in Melbourne.

Getting the backing of high-profile trucking magnate Lindsay Fox would be key to the success of the deal given that he has a 17% stake in the target.

Others hit with the M&A fever

Qube isn't the only S&P/ASX 200 (Index:^AXJO) (ASX:XJO) stock that's been bitten by the M&A bug. There's also talk that Boral Limited (ASX: BLD) will make a play for Knauf's Asian operations, Slater & Gordon Limited (ASX: SGH) and Shine Corporate Ltd (ASX: SHJ) are contemplating a marriage of equals, while Wesfarmers Ltd (ASX: WES) is actively looking for acquisitions post the Coles Group Ltd (ASX: COL) demerger.

There's plenty of things to watch for in the new financial year and the experts at the Motley Fool believe there's another group of ASX stocks that can get investors' pulse racing (in a good way, of course).

Follow the free link below to find out more.

Motley Fool contributor Brendon Lau owns shares of Boral Limited. Connect with him on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

two men in business suits sit across from each other at a table with a chess board on it. Both hold their hands to their chins and look down in serious contemplation of their next move.
Resources Shares

'Not ruled out': Could BHP still buy Anglo-American?

This mega-deal might not be as dead as it looks.

Read more »

Happy couple looking at a phone and waiting for their flight at an airport.
Travel Shares

Flight Centre share price higher on acquisition news

The travel agent is betting big on cruises. Here's what you need to know.

Read more »

A young woman with her mouth open and her hands out showing surprise and delight as uranium share prices skyrocket
Consumer Staples & Discretionary Shares

Myer and Premier Investments shares jump on huge merger news

The two retailers are combining some of their operations. Let's dig deeper into the plan.

Read more »

a woman drawing image on wall of big fish about to eat a small fish
Mergers & Acquisitions

Guess which $9 billion company is acquiring another ASX stock

This big fish is looking to acquire a small fish in a $45 million deal.

Read more »

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today
Mergers & Acquisitions

TPG Telecom shares rise on $5.2b asset sale to Vocus

The telco is unlocking value by divesting assets. Here's what's happening.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Technology Shares

Why are Appen shares sinking today?

Let's see what is going on with this high-flying tech stock today.

Read more »

A silhouette shot of two business man shake hands in a boardroom setting with light coming from full length glass windows beyond them.
Mergers & Acquisitions

Rio Tinto share price rises on $10b Arcadium Lithium takeover deal

Management believes the deal makes it a global leader in energy transition commodities.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Mergers & Acquisitions

Arcadium Lithium shares rocket 46% on Rio Tinto takeover approach

The mining giant could soon become the third largest lithium supplier.

Read more »