The Brambles Limited (ASX: BXB) share price has come under pressure on Tuesday.
In morning trade, the logistics solutions company's shares are down 7% to $10.75.
Why is the Brambles share price sinking?
Investors have been selling down the Brambles share price today following the release of an update on a takeover approach.
On Monday, the company confirmed speculation that it was in takeover talks with private equity giant CVC Capital Partners.
As we covered here, CVC was reportedly considering bidding around $20 billion for the pallet and container maker. Based on the Brambles share price at the time, this would imply a premium of ~30%.
However, Brambles advised that the "engagement is preliminary, incomplete and there has been no formal proposal received from CVC." It went on to warn that there was "no certainty that the engagement will lead to a binding proposal being received from CVC."
What's the latest?
As you might have guessed from the Brambles share price reaction, today's takeover update has not been a good one.
According to the release, CVC Capital Partners has decided to walk away from discussions with Brambles.
The company advised:
Brambles informs the market that CVC has today advised that it will not be putting forward a proposal nor seeking to conduct detailed due diligence at this time due to the current external market volatility. The engagement has therefore concluded earlier today.
What now?
As per yesterday's announcement, the Brambles board and management team remain focused on implementing the Shaping our Future transformation plan.
This plan builds on the strength of Brambles' sustainable business model to transform the business and unlock value for customers and shareholders.
Though, it will also continue to explore other options for the company that maximise shareholder value.
