EGL: Bitter takeover battle takes new twist
published: cw 13, 2007 in Mergers & acquisitionsThe battle to buy US freight forwarder EGL has taken a new twist. Private equity company Apollo, which made a counter offer to the consortium led by CEO James Crane, has issued a writ against EGL, claiming that it has not been given adequate access to its books or senior management. At the same time, Apollo increased its offer to $41 a share from $40. This compares with Crane’s offer of $38.
Additionally an EGL shareholder, mutual fund Federated Kaufman, has filed a suit to block the sale of the company to Crane. It believes that the Special Committee overseeing the sale rushed to make an agreement with Crane before Apollo could make its bid. It also believes that the $38 a share significantly undervalues the company.
The suits prompted a sharp response from Crane. In order, as he sees it, to put the record straight, he issued a statement condemning what he calls the erroneous stories which have been circulating. He said that Apollo had not, and still has not, made a firm offer which it has been willing to sign. He also stated that, as far as he understood it, Apollo had been given plenty of access to non-public information prior to his own offer for the company. Additionally senior management had also been made available.
The controversy over the bid process is likely to hot up over the next few days. Both parties look unwilling to give ground, although the lawsuits which have been filed may influence the outcome. However one thing is certain: if Apollo wins there will be significant changes in senior mangement and with it possible change in strategy.
Source: Transport Intelligence
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