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Western Star confirms takeover talks

KELOWNA, B.C. - The trading of Western Star Trucks stock was halted at 10:05 a.m. on June 20 after company stock values jumped 19 per cent amid speculation of a US $300-million takeover bid from Freig...


KELOWNA, B.C. – The trading of Western Star Trucks stock was halted at 10:05 a.m. on June 20 after company stock values jumped 19 per cent amid speculation of a US $300-million takeover bid from Freightliner LLC parent Daimler Chrysler.

Share values jumped $4.50 to $23.50 before the Toronto Stock Exchange halted the trading.

Trading resumed the next day, with the company confirming that it was in discussions with a “third party”. But neither Freightliner nor Western Star officials will confirm reports that DaimlerChrysler is the suitor.

“We don’t comment on any rumor or speculation,” said Western Star spokesman Doug Shand. But there has been plenty to go around. Rumors of Freightliner’s interest have been circulating for almost two months, with some Western Star dealers even wondering whether their next corporate home would be Portland, Ore. – the site of Freightliner LLC.

While it released a statement after markets closed, Western Star noted that it “emphasizes that there can be no assurance that any discussions will result in an agreement or transaction.”

Among shareholders that would have to be consulted is the B.C. government, which last year invested $60 million in company shares with promises of a plant expansion in Kelowna, B.C. While the province doesn’t have voting rights attached to the shares, it does have a seat on the board.

Terrence Peabody, Western Star’s chairman, controls about 42 per cent of the stock.

Any deal would have to address commitments with the B.C. government for a new manufacturing facility, Shand added.

Western Star employs about 3,900 people, and has heavy-truck plants in Kelowna and North Charleston, S.C. Its Orion bus division builds transit buses in Mississauga, Ont. and Oriskany, N.Y. n


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