Brambles puts capital management over Loscam interest

Loscam describes itself as a trusted name in pooling and returnable packaging solutions.

Brambles is appearing less likely to emerge as a buyer of Loscam assets any time soon, with the Australian logistics company on Wednesday emphasising that capital management was more of a priority.

While the $22bn Brambles did not dismiss an acquisition outright, some took the messaging from its results announcement on Wednesday that returning capital to shareholders was its key focus by way of increased dividends and a share buyback worth up to $US500m.

It was a move that was seen as favourable by investors and its shares closed more than 9 per cent higher.

Brambles has been working with Greenhill on a possible bid for the Southeast Asian arm of Loscam.

Loscam has recently been back up for sale through investment bank UBS.

While parties have submitted offers for the business, the process appears to have somewhat drifted, with owners thought to be unclear over whether to sell or retain the operation.

Initial price expectations for the company as a whole, which include operations in China, Southeast Asia, Australia and New Zealand, were about $3bn.

There had been debate among owners whether to split the business up or sell it in one line.

Owners include China Merchants, Citic Capital and FountainVest.

Brambles was interested in buying the Southeast Asian unit, with restrictions from the competition regulator preventing it buying the ANZ arm.

Other Loscam suitors were thought to be KKR and EQT for the group that makes about $200m in earnings before interest, tax, depreciation and amortisation for its combined operations.

Loscam describes itself as a trusted name in pooling and returnable packaging solutions for supply chains.

China Merchants purchased the business in 2010 for $US650m in a deal involving Credit Suisse and Deutsche Bank, and in 2018 it sold down a 55 per cent interest to CITIC Capital Partners and FountainVest.