Swift Transportation shareholders approve buyout

0 Comments | Deseret News (Salt Lake City), Apr 30, 2007 | by Angela Greiling Keane Bloomberg News

Shareholders of Swift Transportation Co., the third-largest U.S. trucking company by sales, approved a $2.5 billion buyout Friday by the company's founder, Jerry Moyes.

The board of Phoenix-based Swift agreed in January to Moyes's $31.55-a-share cash offer to take the company private.

Holders of more than 83 percent of outstanding common shares voted in favor of the buyout, Swift said in a regulatory filing. The transaction is expected to close the week of May 7, the company said. Moyes didn't return phone calls seeking comment.

Moyes helped found Swift in 1966 with a single truck to haul steel and took the company public in 1990. He grew upset with the way Swift was operated after he left as chief executive officer in 2005, the company has said in regulatory filings.

Moyes was ousted after insider-trading allegations. He paid $1.25 million to the SEC in 2005 to settle the case without admitting or denying wrongdoing.

Saint Acquisition Corp., which Moyes formed to buy Swift, plans to sell $835 million in second-lien senior secured notes by May 2, according to KDP Investment Advisors Inc. Saint Acquisition is also issuing a senior secured credit facility of $2.1 billion. Saint Acquisition will merge with Swift upon the acquisition's completion.

"Swift's market position and long relations with key large shippers, along with its relatively high variable cost structure, should preserve the company's ability to adequately service its debt during an economic downturn," Jonathan Root, a New York-based analyst for Moody's Investors Service, said in an April 20 report to investors.

Moody's rated the senior secured facility B1 and the notes Caa1, four and seven levels below investment grade, respectively.

Swift rebuffed Moyes's unsolicited November attempt to purchase Swift for $29 a share. In December, Swift boosted Chief Executive Officer Robert Cunningham's salary 26 percent and gave him $2.2 million in bonuses as it tried to fend off the buyout.

Swift's profit plummeted 74 percent in the first quarter to $10 million because of the pending buyout, bad weather, higher fuel costs and lower shipping demand, the company said.

Jason Seidl, a Credit Suisse analyst based in New York, called the profit drop "astonishing" in an April 20 note to investors.

Contributing: Bryan Keogh