Swift Transportation Co. confirmed today, Nov. 6, that it has received a $29-per-share buyout bid from its largest shareholder, former Chief Executive Jerry Moyes. Phoenix-based Swift has set up a committee to evaluate the offer, the company said in a statement.
In its quarterly earnings report on Oct. 25, Swift reported 75.9 million shares outstanding, making the takeover offer worth $2.2 billion. Moyes, currently a director at Swift, said in a letter to Swift’s board that he had received a written commitment from Morgan Stanley to provide all necessary debt financing for the deal.
“Given Swift’s recent performance, $29.00 per share is a full and fair price for Swift’s common stock,” Moyes wrote in his letter, dated Friday, Nov. 3, “providing an attractive opportunity for its stockholders to maximize the value of their investment in Swift.” The board has until Nov. 20 to consider the offer, Moyes said.
For the company’s third fiscal quarter this year, net earnings were $33.5 million, compared to $12.6 million for the third quarter of 2005. Operating revenue increased 0.3% to $815.0 million compared with $812.9 million last year; but excluding fuel surcharge revenue, net revenue decreased 3.3% to $681.9 million from $704.9 million.
Swift said the decrease in revenue excluding fuel surcharge was due primarily to the reduction in average operating tractors by about 800 units from the third quarter of 2005 to the third quarter of 2006. The impact of this reduction on operating revenue was offset partially by an increase in revenue per loaded mile, which increased 3.5% to $1.6353 from $1.5797.
Swift said it currently is working its way through a program to boost its bottom line and improve its services.
Moyes founded Swift in 1966 and ran it for decades, but stepped down as president in November 2004 and as CEO in December 2005 in the wake of a federal lawsuit over his stock transactions. While neither admitting nor denying any wrongdoing, Moyes agreed in fall 2005 to pay $1.26 million to settle charges of insider trading with the U.S. Securities and Exchange Commission.
Earlier this year, Moyes reached an agreement to buy Central Freight Lines, based in Waco, Texas, and take the company private. Moyes also is majority owner of the Phoenix Coyotes NHL team and the Arizona Sting lacrosse team.