ZURICH/COPENHAGEN (Reuters) – Denmark’s DSV has made a $4.1 billion takeover approach to Swiss rival Panalpina to try to close the gap on the world’s top three freight transport companies.

Shares in Panalpina, which has come under pressure from an activist investor to do a deal, jumped as much as 31 percent to an 11 year high of 179.3 Swiss francs on Wednesday – above DSV’s proposal and signalling investors expect a higher offer.

Logistics companies are looking to build scale in a fragmented freight transport market. DSV’s approach to Panalpina comes just months after it failed in an attempt to buy Switzerland’s Ceva Logistics.

Panalpina said it had received an unsolicited, non-binding proposal from DSV of 170 Swiss francs per share. It added it would consider the cash and shares proposal, which values it at about 4 billion francs ($4.1 billion), despite saying recently it aimed to remain independent.

Bank Vontobel analysts said the suggested price was appropriate, but a counterbid was possible.

“What I can imagine is that DSV is going to have to dig deeper into its pockets and offer a bit more,” said Zuercher Kantonalbank analyst Marco Strittmatter.

DSV is currently the world’s fifth largest freight forwarder behind the likes of DHL Logistics. A tie-up with Panalpina would help it to rival Germany’s DB Schenker as the No. 3 player.

DSV CEO Jens Bjorn Andersen said he was attracted by Panalpina’s large presence in air and sea transport.

“We’ve been watching Panalpina for many years, and a tie-up will make us significantly bigger outside Europe,” he said, adding DSV’s exposure to the European market would fall to around 60 percent from 71 percent now if the deal goes ahead.

Late last year, Switzerland’s Kuehne & Nagel said it was ready to talk with Panalpina about a potential takeover. On Wednesday, Kuehne & Nagel declined to comment on whether it was still interested in a deal.

ACQUISITIONS

Activist investor Cevian Capital, which owns 12.3 percent of Panalpina, has recently gone public with frustrations over the company’s progress. It has urged Panalpina to be open for a takeover amid its struggles in ocean freight, a delayed IT system and growth that lagged rivals.

Any deal must win the blessing of Panalpina’s largest shareholder, the Ernst Goehner Foundation, with a nearly 46 percent stake. The foundation declined to comment on DSV’s offer on Wednesday. Cevian also declined to comment.

At 0930 GMT, Panalpina’s shares were up 27.5 percent at 174.7 francs. DSV’s were up 3.1 percent at 487.2 Danish crowns.

DSV could issue new shares equivalent to close to 20 percent of its share capital to help fund the deal, Andersen said.

The company has a strategy of growing via acquisitions. In 2016 it bought California-based UTi for $1.35 billion. In October, it abandoned a bid for Ceva after its 1.53 billion Swiss franc bid was rejected.

The world’s top 20 freight forwarding companies control less than a third of the global market, which features thousands of small players.

With some 20,000 long-haul trucks on the road every day and about 200 warehouses across Europe, DSV handles everything from pallets of turf to resurface a football pitch at short notice to the entire supply-chain for multinational companies.

DSV warned on Wednesday it expected queues of trucks from London to the southeastern port of Dover if Britain fails to secure an orderly withdrawal deal from the European Union.

($1 = 0.9881 Swiss francs)