Phoenix-based truckload carrier Swift Transportation has rejected a $2.2-billion cash buyout offer from Jerry Moyes, its founder and former chairman & CEO, saying in effect that his offer of $29 per share was too low-- which potentially leaves the door open for another bid.
Moyes himself is prepared to offer more money, he said in a letter to Swift’s board of directors. “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,” he stated. “Given Swift’s recent performance [however] $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.”
Yet Swift’s board doesn’t seem to think Moyes’ $29 per share offer is that great. That’s largely because Swift’s stock has been trading at $27 to $28 per share lately and hit a high of $33.60 back in July.
Still, Moyes has room to increase his offer. He could roll over substantially all of his current investment in Swift (some 38% of its stock) along with a written commitment from Morgan Stanley for up to $2.5 billion.
Moyes, who founded Swift in 1966 and served as chairman & CEO for nearly four decades, decided to step down from both his executive positions in October of last year. But that change didn’t come easy or willingly. Moyes stepped down after settling a lawsuit brought against him by the Security and Exchange Commission (SEC) for $1.26 million in 2004. SEC had accused him of insider stock trading.