Swift Transportation Co., Inc. (NDAQ:SWFT) confirmed today that it received a bid for the company at $29 per share in cash by Jerry Moyes, the company's largest shareholder and former CEO. Now usually we wouldn't pay attention to a stock that has already moved; however, the stock jumped over 23% on the news in early morning trading today to $29.60 - a premium which usually indicates the anticipation of a raised bid. This possibility makes the stock worth watching a little more closely!
According to a letter attached to the
13D/A filing:
"I am pleased to submit this proposal to acquire Swift Transportation Co., Inc. ('Swift') at a substantial premium to the market value of Swift's shares. I propose to acquire Swift through a corporation to be formed by me in an all-cash transaction at a price of $29.00 per Swift common stock share. To finance the transaction, I will roll over substantially all of my current investment in Swift and have received a written commitment from Morgan Stanley for the entire amount of the debt financing necessary to consummate the transaction. Given Swift's recent performance, $29.00 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. The $29.00 offer price represents a significant, more than 21%, premium over yesterday's closing price for Swift's shares. I believe such a transaction would be in the best interests of Swift and its stockholders, and that Swift’s stockholders will find such a transaction compelling." (Read More)
The offer is still well off of Swift's highs of the year of just over $33 per share. Swift is also trading below its enterprise value with a PE of 14x earnings even after this move. While this buyout price erases nearly all of the stock's losses on the year, it would not be unfeasible for the buyout price to rise higher. Currently, the Board of Directors is reviewing the offer, with Goldman, Sachs & Co. as its financial advisor. This stock is definitely worth watching as this offer is evaluated.
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