“Big Three” have become the “Big ONE.” This week, Yellow Corp. agreed
to acquire Roadway Corp. for about $966 million in cash and stock,
plus $140 million in debt, for a total value of $1.1 billion. The
company, which will be known as Yellow-Roadway Corp., will be the
largest U.S.-based less-than-truckload carrier.
years, LTL freight was dominated by Yellow, Roadway and Consolidated
Freightways. Consolidated Freightways, which had been the nation's
third-largest trucker, closed and filed for bankruptcy protection
deal values each Roadway share at $48, the companies said in a joint
statement Tuesday. That represents a 49 percent premium based on
the average closing price of Roadway stock over the past 60 days,
the companies said.
on Monday's closing price of $30.02, Yellow is offering a 60 percent
premium to Roadway shareholders. Both stocks were halted Tuesday
morning for news dissemination. Yellow Corp. shares, listed on the
New York Stock Exchange, closed Monday at $24.49.
combined entity posted nearly $6 billion in revenue for the 12 months
ending March 31.
Tuesday, Roadway reported its second-quarter earnings rose 11 percent
to $6.3 million, or 33 cents a share, meeting its reduced target.
Revenue for the quarter was $741.5 million, up 13 percent.
to a company release, Roadway had slashed its second-quarter estimate
in early June, blaming soft tonnage levels, pricing pressures and
a shift in freight mix. Some analysts attributed the shortfall to
company-specific issues rather than to wider industry concerns.