Danish logistics company DSV's $4 billion-plus bid for Panalpina hit a roadblock on Monday when the Swiss freight forwarder's top shareholder rejected the offer, saying Panalpina should stick to its own "consolidator strategy".
Panalpina shares traded 8.5% lower at 163 Swiss francs by 0815 GMT, according to premarket indicators. They had risen more than a third this year on last month's DSV offer initially pitched at 170 Swiss francs per share.
The snub by the Ernst Goehner Foundation, which owns nearly 46% of Panalpina shares, marks the second time in the last few months that DSV Chief Executive Bjorn Andersen has encountered resistance in Switzerland.
In October, CEVA Logistics rejected the Danes' $1.55 billion approach and subsequently deepened ties with French shipping company CMA CGM.
"We strongly believe that Panalpina can create more value for its shareholders, customers and employees through its consolidator strategy than the published non-binding purchase offer from DSV," said Ernst Goehner Foundation board member Thomas Gutzwiller in a statement.
Another big Panalpina owner, 12.3% stakeholder Cevian, has been pushing for the Swiss company to consider being bought out, amid its struggles in ocean freight, a delayed IT system and profitability and growth that have lagged rivals.
Sweden-based Cevian and DSV both declined to comment.
Andersen wants Panalpina's air- and sea-freight operations to help DSV consolidate the fragmented freight-forwarding industry. The deal, if it succeeds, would make DSV the industry's fourth-largest player, behind DHL Logistics, Kuehne & Nagel and DB Schenker.
The snub of DSV by Panalpina's top shareholder could mean Andersen must raise his cash-and-shares bid to convince important investors to back the proposal.
Previously, Andersen declined to say if DSV would consider raising its offer, should it encounter resistance, but said that "we are not afraid of failing twice" should the Panalpina deal end similarly to its bid for CEVA.
Analysts from Baader Helvea said, however, they would not rule out a higher bid.
In response to the foundation's decision not to back the DSV bid, Panalpina said its board "continues to carefully review the situation with its professional advisers".
The 20 largest freight forwarders control only about a third of the market, making the industry potentially ripe for takeovers or partnerships as companies seek to boost profitability and take advantage of economies of scale.