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Knight 'disappointed' USA Truck rejected proposal

Knight also announced Monday disclosed an increased ownership position of 1,192,364 shares of USA Truck common stock, representing approximately 11.3 percent of USA Truck’s shares outstanding. (The Trucker file photo)

The Trucker News Services

9/30/2013

PHOENIX  — Knight Transportation Monday said it was disappointed that USA Truck had rejected Knight’s $9 per share, all cash, premium proposal.

“We are disappointed that USA Truck has once again rejected Knight’s all-cash, premium proposal,” Knight Transportation said in a published statement. “Since making our proposal public, we have had discussions with several of USA Truck’s largest shareholders that have indicated their support for our proposal and have encouraged us to continue to take the necessary steps to acquire USA Truck.  We continue to believe that a combination of Knight and USA Truck is better positioned to deliver value for and is in the best interest of all of Knight and USA Truck’s stakeholders, and we are prepared to take the necessary steps to make this combination a reality.

Knight also announced Monday that it has filed with the U.S. Securities and Exchange Commission an amendment to its Schedule 13D, originally filed on Sept. 26, disclosing an increased ownership position of 1,192,364 shares of USA Truck common stock, representing approximately 11.3 percent of USA Truck’s shares outstanding.

As previously announced on Sept. 26, Knight proposed to acquire all of the outstanding shares of USA Truck for $9 per share in cash, valuing the equity of USA Truck at approximately $95 million.

The total value of the proposed transaction is approximately $242 million, including USA Truck’s approximately $147 million of outstanding net indebtedness.

The proposal represents a significant premium of approximately 39 percent to USA Truck’s closing price on Sept. 25, 2013, the last trading day prior to public announcement of Knight’s proposal; a premium of approximately 50 percent to USA Truck’s average closing price for the ten trading day period prior to Knight’s announcement; and a premium of approximately 58 percent to USA Truck’s closing price on Aug. 27, the last trading day prior to Knight’s Aug. 28 proposal letter to USA Truck’s Board of Directors.

Evercore is acting as financial advisor to Knight and Fried, Frank, Harris, Shriver & Jacobson LLP is acting as Knight’s legal advisor.

USA Truck said in a prepared statement issued last week that it was disappointed Knight Transportation made public its unsolicited takeover offer.

USA Truck, based in Van Buren, Ark., said its board previously reviewed Knight Transportation's offer and unanimously determined that it undervalues the company and is not in its shareholders' best interests.

USA Truck said it had offered to meet with Knight Transportation to talk about why it considered the bid inadequate, but that Knight Transportation turned down the offer to meet. USA Truck said Knight Transportation also said it saw no point in having further talks about a possible transaction at that time.

USA Truck said that it is still open to all strategic options, including further talks with Knight Transportation. But the company added that it still feels that moving forward with its strategic plan provides superior value to its shareholders.

 The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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