Vitran will review an offer for its Canadian business from Canadian trucking giant TransForce, but is focused on completing the sale of its ailing U.S. business, Vitran Express, the company said.
TransForce, a $3.1 billion transportation holding company with headquarters in Montreal, today offered to buy all outstanding shares of Toronto-based Vitran for $4.50 a share, as long as Vitran is able to complete the sale of its U.S. operation.
In a statement, Vitran noted that its NASDAQ stock price was $4.72 per share Sept. 25. The share price climbed to $5 Sept. 26 as news of the TransForce offer spread.
"Shareholders are cautioned that Vitran has only received the proposal, which does not constitute a formal takeover bid, and no decisions or recommendations have been made by the board of directors of Vitran in response to the proposal," the company said in the statement.
"Vitran's management and board of directors are focused on completing the sale of Vitran's U.S. LTL business on or before Oct. 7, 2013 and supporting Vitran's market leading Canadian LTL operations."
Vitran runs two distinct LTL operations, Vitran Express in the U.S., which it plans to sell to Detroit trucking magnate Matthew Moroun, and Vitran Canada Express. Nearly three-quarters of its LTL revenue comes from the U.S. business.
The U.S. operation faltered after expanding rapidly through acquisitions, contributing heavily to five straight years of losses at Vitran, totalling $164.5 million. The Canadian LTL business, however, is considered healthy.
Vitran Canada Express "is one of the best LTL operations in Canada," said Satish Jindel, president of SJ Consulting Group, Pittsburgh. "Any company that wants a presence in Canada needs to be engaged in this bidding process."
Will there be a bidding war for Vitran Canada? "There should be, if people are awake," Jindel said.