The bidding war is over. CEVA Group signed on Thursday morning a definitive merger agreement to acquire EGL for approximately $2 billion, or $47.50 per share in cash.
A rival investment group headed by James R. Crane, the company's largest shareholder, chief executive officer and chairman of the board, failed to raise its bid by close of business Wednesday May 23, a deadline set in the latest offer.
On the unanimous recommendation of a special committee comprised entirely of independent directors, the board of directors of EGL approved the agreement and will recommend that EGL's shareholders approve the merger.
EGL also terminated its previous merger agreement with the Crane group, and paid them a $30 million termination fee.
Although the purchase price is lower than the price of EGL stock a year ago, it represents a premium of approximately 60 percent over $29.78, the closing price of EGL stock on December 29, 2006, the last trading day before an initial proposal was made by the Crane group to take EGL private. It also represents a 25 percent premium over the $38 per share consideration that was to be paid under the Crane group's agreement.
With this merger, CEVA Logistics, formerly known as TNT Logistics and now owned by affiliates of Apollo Management, will create the world's fourth largest integrated supply chain management company.
"Maintaining the continuity of EGL's senior management team and its employees around the world is a priority and CEVA is committed to ensuring a smooth transition of ownership and continuing the strong relationships EGL has with its transportation partners," CEVA CEO Dave Kulik said.
All existing operations at EGL will remain unchanged following the merger and will be managed under a new freight management division, headquartered at EGL's existing location in Houston, Texas, the company said.
The transaction is subject to regulatory approvals and the affirmative vote of the holders of a majority of EGL's outstanding shares. EGL and CEVA anticipate the transaction will close in the third quarter of 2007.