Shareholder seeks to buy Swift

0 Comments | Deseret News (Salt Lake City), Nov 7, 2006 | by Associated Press

PHOENIX -- The largest shareholder of Swift Transportation Co. has proposed buying the trucking company for about $2.2 billion, the company said Monday. Wall Street bet the price would go higher.

Jerry Moyes, a current member of the Swift board and its former chief executive officer and board chairman, has offered $29 a share for the company. That was a 20.6 percent premium over its closing price on Friday,

But Swift Transportation shares climbed $5.79, or 24.1 percent, to close at $29.84 on the Nasdaq Stock Market, or nearly 3 percent above the offered price. Swift has traded in a 52-week range of $18.80 to $33.66.

Swift Transportation has formed a committee to review the offer, with Goldman Sachs & Co. serving as the company's financial adviser. Swift Transportation spokesman Dave Berry declined to comment.

Moyes, who owned 27 percent of the trucking company's stock as of Oct. 16, said in a letter to the chairman of the Phoenix-based company that he would finance the deal with his stake in Swift and additional financing from Morgan Stanley.

Moyes also said in the letter that he may be willing to increase his offer in light of any factors that might justify a higher price.

A call left for Moyes wasn't immediately returned Monday.

Thomas Wadewitz, an analyst at J.P. Morgan Securities, said in a research note that Swift's board is likely to ask for a higher price.

"We do not expect competing bids to emerge, and so we believe there is potential downside for (Swift) stock if the board rejects this bid and Mr. Moyes is unable to finance a higher priced bid," Wadewitz said.

John Larkin, an analyst at Stifel Nicolaus & Co., said in a research note that he believed the probability of the deal being completed at $29 per share, or perhaps a dollar or two higher per share, was good.

"We doubt that any strategic or financial acquirers will surface to top the Moyes bid, because it would be difficult to consummate a transaction without the support of the Moyes family," Larkin said.

Moyes also is the majority investor for the Phoenix Coyotes hockey team.