LTL monolith Yellow Roadway Corp., Overland Park, Kan., and USF Corp. announced that the deal for Yellow Roadway’s purchase of USF has changed.
The original deal called for USF shareholders to get 50% percent of the purchase in Yellow Roadway stock and 50% in cash. According to an announcement earlier this week, those shareholders will now receive 35% or the price in Yellow Roadway stock and 65% in cash.
“The previous agreement gave USF shareholders the option of choosing cash or stock. Under Nasdaq Stock Market rules, Yellow Roadway no longer needs shareholder approval because it will be issuing fewer than 20 percent of its current outstanding shares in the deal. USF shareholders will vote May 23,” explained the Kansas City Star, Yellow Roadway’s hometown daily. The deal is set to close the following day.
The paper also noted that Yellow Roadway shares have dropped by 20% since the purchased was announced on Feb. 27 and USF recently reported a quarterly loss. The decline in the Yellow Roadway stock’s value enables the company to reduce the number of shares to be issued for the purchase. As a consequence, earnings per share increase.
Under the revised terms, USF shareholders are entitled to receive $29.25 (65% x $45.00) per share in cash and 0.31584 (35% x the fixed exchange ratio of 0.9024) shares of Yellow Roadway stock for each share of USF stock.
According to the announcement:
* There will no longer be a cash election feature for USF shareholders as they will now receive approximately 65% of the consideration in cash.
* The transaction will now be taxable to USF shareholders.
* Under applicable NASDAQ Stock Market rules, a Yellow Roadway shareholder meeting and vote will no longer be required to approve the transaction, since the number of shares that Yellow Roadway will issue as consideration to the USF shareholders is fewer than 20% of the number of Yellow Roadway shares currently outstanding.
* In accordance with the merger agreement, the transaction will close one business day after all conditions have been met. The transaction is currently scheduled to close on May 24, 2005.


0 Comments