Some shareholders of SCS Transportation are demanding the trucking giant sell its New Jersey-based Jevic subsidiary, claiming that it is “underperforming” and is a drag on the stock price, the Bergen (N.J.) Record reported.
A group of investment funds led by Starboard Value and Opportunity Master Fund, which together own nearly 6 percent of Kansas City, Mo.-based SCS, said Thursday, Jan. 12 they are calling for the company to auction off Delanco, N.J.-based Jevic, according to the Record. The dissident shareholders say SCS should sell Jevic and keep its other large trucking subsidiary, Georgia-based Saia.
Through September 2005, Saia had increased sales by 15 percent and income by 36 percent compared with the first nine months of 2004. During that time, Jevic’s sales grew by 3 percent and income plummeted by 70 percent. SCS spokesman Greg Drown told the Record that the company put new management in place at Jevic this summer, and that the unit isn’t for sale.
But according to the Record, Starboard said in a letter to Herbert Truckess, SCS chief executive officer, that SCS is “significantly undervalued” and that the board “has not taken the appropriate steps to correct this situation.” Starboard plans to pressure SCS by instigating a proxy fight, the newspaper reported.
