The co-founder of Swift Transportation has offered to buy
out all outstanding shares of the company, and offered $29 a share, which is $5
more per share than the stock's trading price.
"Given Swift's recent performance, $29
per share is a full and fair price for Swift's common stock, providing an
attractive opportunity for its stockholders to maximize the value of their
investment in Swift," Moyes wrote to Swift officials in his Nov. 3 proposal
letter. "The $29 offer price represents a significant, more than 21 percent,
premium over yesterday's closing price for Swift's shares.
The founder and former CEO of Swift has proposed to take the
company private in the all-cash offer of $29 per share, according to an A.G.
Edwards and Sons Equity Research Recent Development Report by transportation
analyst Donald Broughton.
"I am prepared to consider any
factors that you believe justify a higher purchase price, and, upon the
completion of due diligence, I may be willing to increase my proposed price,"
Moyes wrote in his proposal letter.
According to the report released by
A.G. Edwards, Broughton doesn't see that happening.
"We see this scenario as unlikely
given the already rich multiple implied in the $29 per share offer," Broughton
In the report, the Swift stock was downgraded to "sell" by
"We would point out that if the deal is consummated, Moyes
will have assumed/borrowed a total liability of about $2.15 billion . or about
2.5 times tangible book value," Broughton wrote in the report. "We believe this
transaction isn't about economics, it's about ego."
According to a Nov. 6 Securities and Exchange Filing by
Moyes, he owns 27.1 percent of the outstanding shares of Swift stock.
Moyes paid $1.25 million in September 2005 to settle a case
accusing him of insider trading. He had purchased nearly 190,000 shares of
Swift stock just before the company reported better-than-expected earnings.
Moyes stepped down as chairman and CEO in October 2005.
?- By Jami Jones, senior editor