Revelations this week that YRC Worldwide had considered acquiring Arkansas Best, parent of ABF Freight System, earlier this year seemed to help both companies on Wall Street. Their per share stock prices, rising since April, kept climbing.
Arkansas Best’s share price leapt by almost a dollar at the opening of the stock exchange May 9, when reports of YRC’s “preliminary proposal” to purchase the $2.1 billion trucking operator hit newswires. DC Velocity broke the story late May 8.
Shares of both Arkansas Best and YRC Worldwide were trading under $10 in late April, but surged in early May and continued to climb as news of the prospective — but eventually rejected — acquisition proposal by YRC Worldwide spread.
YRC Worldwide’s stock began a gentle climb from $6.69 a share April 22 to $7.76 per share May 2 before shooting up to $15.44 a share May 6. The share price dropped to a new of $13.60 May 8, before rising to $15.50 at one point on May 10.
Arkansas Best’s stock price hit a high of $17.93 per share early May 10 after climbing from $9.73 May 1. The company’s share price surged May 4, rising from $10.55 to $14.73 after ABF reached a tentative pact with the Teamsters union.
By later May 10, Arkansas Best’s stock had dropped back to about $16.50, but was still up more than 40 percent from April 10. YRC Worldwide’s stock price increased nearly 88 percent over the course of the month, with the biggest leap in May.
Arkansas Best’s share price rose 23.2 percent from May 6 through May 10, while YRC Worldwide saw its share price increase 12.5 percent over the same period.
YRC Worldwide benefited from a generally positive first quarter earnings report May 3. The $4.9 billion holding company posted a first quarter operating profit for the first time since 2007 and cut its losses substantially year-over-year.
In an interview, CEO James Welch said YRC Worldwide subsidiary YRC Freight could improve shipment and lane density by merging its network with ABF. “Both ABF and YRC Freight could use more density in their networks,” Welch said.
YRC Worldwide is No. 4 in JOC’s ranking of the Top 50 Trucking Companies for 2012, and Arkansas Best is No. 11. YRC Freight and ABF Freight System are No. 3 and No. 6, respectively, in JOC’s ranking of the Top 25 LTL Carriers for 2012.