USA Truck rejects acquisition bid by Knight

Posted: September 26, 2013 at 7:38 a.m.
Updated: September 26, 2013 at 8:53 a.m.

Phoenix-based Knight Transportation Inc. on Thursday announced it had proposed in August to acquire all the outstanding shares of USA Truck Inc., an offer the Van Buren-based trucking firm rejected earlier this month.

Knight said in a statement that the total value of the deal about $242 million, with $95 million of that USA Truck's equity and the other $147 million its outstanding debt. Knight had given USA Truck's board of directors until Sept. 6 to respond.

"On September 6, 2013, USA Truck’s Board of Directors rejected Knight Transportation’s August 28, 2013 proposal as inadequate and indicated that “the Company is not for sale,”" according to U.S. Securities and Exchange Commission documents filed Thursday. "In light of USA Truck’s negative response, Knight Transportation communicated to USA Truck that Knight Transportation saw no merit in engaging in discussions directly with USA Truck management."

Knight said the $9 cash-per-share proposal represented a 39 percent premium over that price, 50 percent over USA Truck's average closing price over the past 10 trading days and about 58 percent over the trucker's closing price of $5.69 on Aug. 27, the day before Knight sent an acquisition proposal letter to USA Truck's board of directors.

USA Truck's stock price closed Wednesday at $6.46 per share.

"Knight Transportation has at various times evaluated the possibility of a combination with USA Truck and communicated to USA Truck several proposals for a transaction, all of which were rejected by USA Truck," Knight wrote in the SEC filing.

Knight also announced it had filed a Schedule 13D "beneficial ownership report" with the U.S. Securities and Exchange Commission disclosing its ownership of 829,946 shares of USA Truck common stock, or about 8 percent of the firm's outstanding shares.

The Aug. 28 letter outlined Knight's interest in USA Truck, arguing that the firms share "young tractor fleets with similar average lengths of haul" and "similar positive cultures"; and noting that Knight's executives believe it could improve USA Truck's operational efficiencies and finance its capital needs more inexpensively.

Read tomorrow's Arkansas Democrat-Gazette for full details.