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TRANSFORCE: GRINCH OR SANTA CLAUS?

The last time I wrote, on Christmas Eve, you may recall TransForce had submitted a “superior offer” for Vitran’s Canadian LTL operations of US$6.50/share, threatening to derail Manitoulin’s initial agreement to acquire...


The last time I wrote, on Christmas Eve, you may recall TransForce had submitted a “superior offer” for Vitran’s Canadian LTL operations of US$6.50/share, threatening to derail Manitoulin’s initial agreement to acquire the company for US$6/share. Manitoulin had five business days to decide whether or not to submit a better offer – or walk away. Many of us sipped our egg nog in eager anticipation as to what would become of the latest developments. Would TransForce be the Grinch, who stole the highly-sought Vitran out from under Manitoulin’s Christmas tree?

We got our answer on Dec. 30, when it was announced Manitoulin would step aside, paving the way for TransForce to bring Vitran under its umbrella. The deal, when all is said and done, is believed to be worth $136 million, including the assumption of $29 million in debt. Shareholders make out quite well. The offer of $6.50 per share is an 11.6% premium over Vitran’s closing price on Dec. 9, and a 41.38% premium over its closing price on Sept. 20, before it sold off its US operations.

“We are delighted to have reached agreement with Vitran for what represents the acquisition of an important strategic asset for TransForce with considerable synergistic benefits in the near term and into the future,” announced Alain Bedard, chairman and CEO of TransForce. “We are looking forward to leveraging the strengths of both companies to enhance our service offering for our customers and welcoming the Vitran employees to the TransForce team.”

So, was TransForce the Grinch that stole Manitoulin’s most coveted Christmas present? Well, it all depends on perspective. Manitoulin will be paid a $4-million termination fee for its troubles, so maybe, just maybe, TransForce was actually dressed as Santa Claus.


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