USA Truck And Knight Reach Settlement over Proposed Purchase
February 05, 2014
Truckload companies USA Truck and Knight Transportation have reached a settlement dismissing all claims between the two in connection with litigation arising from Knight’s previously announced proposal to acquire Arkansas-based USA Truck in a $242 million bid.
Under the terms, USA Truck and Knight Transportation will file a joint stipulation to dismiss the lawsuit in its entirety with prejudice, while Knight “will not acquire any securities or assets of USA Truck, propose any tender or exchange offer to acquire USA Truck securities or any consent solicitation or seek representation on the board of directors of USA Truck” through September.
In addition, Knight Transportation has agreed not to vote the USA Truck shares it owns at the company's 2014 shareholder meeting.
“We are pleased that the parties have reached a settlement,” said USA Truck in a statement. “USA Truck's management team and employees have been focused on executing plans to restore the company's profitability and unlock its earnings leverage potential through improved operational excellence, profitable revenue growth and cost effectiveness. Nevertheless, by eliminating any of the distractions that have been created by this litigation, the settlement is a positive outcome for USA Truck's employees, customers and shareholders.”
Kevin Knight, chairman and CEO of the Arizona-based Knight said the agreement is a positive one for Knight “while preserving our flexibility with respect to our investment,”
“Knight Transportation may continue to own shares in USA Truck and, subject to the terms of the agreement, may consider its options in the future regarding that investment,” he said “At this time, our focus is on leveraging our industry-leading operating efficiency to continue gaining market share and meeting the needs of our customers while considering other potentially value-enhancing external growth opportunities.”
Last year Knight made a $9 per share offer for USA Truck, which was rejected by the company.
The company already owned an 8% share of USA Truck when it made the offer and has since increased its stake to more than 12%
USA Truck later filed a suit against Knight claiming Knight used USA Truck's confidential information to begin what it calls a “creeping hostile acquisition” of the fleet.