A diversified holding company said in a press release Thursday, Sept. 28, that it has offered to pay $21 per share for USA Truck of Van Buren, Ark., but that the medium-haul trucking firm now refuses to continue negotiations after months of discussion. The next day, USA Truck countered with its own press release, saying that only a “few informal telephone conversations” had taken place with Liberate Technologies, based in Palo Alto, Calif.
In an open letter to USA Truck President Jerry Orler on Sept. 28, Liberate executives — including Liberate President Phil Vachon — alluded to months of dialogue between the companies, but Liberate also noted that USA Truck refused to discuss its specific offer, nor had the company given Liberate guidance about what a fair offer might be. The current $231 million offer represents a 22 percent premium to USA Truck’s current share price, said Liberate, which argued that USA Truck should become a private company.
“To date, the company’s response to our initial offer has been that it is insufficient, and, therefore, the company has refused to discuss the details of our proposal or to allow us to conduct due diligence,” Liberate executives said in the letter. “The company has, in fact, even been unwilling to give us guidance as to what might constitute a sufficient offer to begin discussions. We ask that you reconsider our offer. If you believe the company is worth more than $21 per share, we would welcome a fuller process that could permit us to validate that higher value and to deliver the best deal possible for all shareholders. If the company were to permit us to conduct due diligence, we may be able to offer a higher price.”
Liberate, in its Sept. 28 letter, asked USA Truck to respond by Thursday, Oct. 5. But the day after Liberate went public with its letter regarding the buyout proposal, USA Truck responded with its own press statement Friday, Sept. 29. USA Truck reported a “few informal telephone conversations initiated by representatives of Liberate Technologies with USA Truck’s management since late August 2006.” It said its board of directors will review and respond “to any serious proposals in appropriate circumstances.”
“However, we have received no written correspondence or offer from Liberate Technologies, nor has that company indicated to us any detailed terms and conditions or any specific structure or timing of any proposed transaction,” USA Truck said in its statement. The trucking firm went on to say that Liberate made a “general suggestion” that USA Truck should consider “going private” in “a transaction involving Liberate Technologies and indicated that they believe $21 per share would be an appropriate price for such a transaction.”
While noting that Liberate “has not made any formal offer that would merit a more specific response from us,” USA Truck said its strategy “contemplates the continued growth of our fleet, aggressive management of operating expenses and other initiatives designed to facilitate long-term growth for the benefit of all our stockholders.”