Knight Transportation Inc. boosted its stake in USA Truck Inc. and vowed to “take the necessary steps” to complete a hostile takeover of the short-haul carrier after its bid was rejected a second time.
Knight increased its holding to 11.3 percent from 8 percent and said it has held talks with several of USA Truck’s largest shareholders, who indicated their support for the $9-a-share offer, according to a filing today. USA Truck spurned the bid on Sept. 26, saying it “substantially undervalues” the company.
“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 said today.
Knight made public its offer to buy the Van Buren, Arkansas-based company in a $242 million transaction on Sept. 26, sending USA Truck shares soaring 36 percent, the biggest advance since its initial public offering in 1992. The combination would help allay risk in the short-haul carrier’s turnaround plan and help reverse eight consecutive quarters of net losses, said Knight, which is based in Phoenix.
USA Truck rose 4.3 percent to $8.96 at the close in New York. The shares have more than doubled this year. Knight was little changed at $16.52 and has increased 13 percent this year.
“Thursday’s press release is our comment,” USA Truck Chief Financial Officer Clifton Beckham said today by phone, referring to the company’s Sept. 26 rebuff of the offer.
Nicholas Leasure, a spokesman for Knight, declined to comment beyond the filing.
This is not the first offer that USA Truck has turned down. The company rejected a proposal for merger talks from Celadon Group Inc. in October 2011.