Vitran is putting a buffer between its Canadian trucking operations and any unwelcome suitors, adopting a “shareholder rights plan” designed to slow or ward off any unsolicited bids and give the company time to evaluate proposals.
Since the sale of its ailing U.S. operations to Matthew Moroun, vice chairman of Detroit-based transportation company CenTra, in October, Vitran’s Canadian business has become an attractive takeover target for other trucking firms.
Vitran Canada Express increased Canadian LTL revenue 3.9 percent in the third quarter and Vitran, shorn of its U.S. business, reported a $1.7 million net profit. Vitran Canada Express had an operating ratio of 93.1 and a $3.4 million profit.
Vitran’s plan follows an unsolicited $4.50 a share bid by TransForce, a $3.1 billion Canadian trucking operator, for Vitran Canada Express in September and TransForce’s acquisition of parts of rival suitor Clarke last week for $88 million.
In mid-October, Clarke paid about $1.79 million for nearly 338,000 shares of Vitran stock, raising its stake in the Toronto-based company to nearly 13 percent. TransForce responded by purchasing Clarke Transport and Clark Road Transport.
That gives TransForce, the 13th largest less-than-truckload carrier on the JOC list of top 50 LTL carriers and a major truckload operator as well, all of Halifax, Nova Scotia-based Clarke’s LTL, truckload and freight logistics business.
“The sale of Clarke’s freight transportation business provides the company with good value and helps unlock the significant shareholder value,” said George Armoyan, CEO of Clarke, which will keep ferry and container shipping businesses.
“This acquisition will further enhance our density in the Canadian LTL and TL markets,” said Alain Bédard, chairman, president and CEO of Montreal-based TransForce. Clarke Transport has 15 LTL terminals across Canada.
Vitran Canada Express, with 23 terminals in its LTL network, would enhance that density even further. TransForce upped its stake in Vitran Nov. 1, spending about $8.2 million to bring its total share of Vitran’s common stock to 19.95 percent.
That 19.95 percent ownership stake is important — Vitran’s plan imposes more stringent reviews on bids from anyone owning more than 20 percent of the company. Those restrictions would hit TransForce if it buys more stock.
“With the divestiture of the U.S. business, we are now in a better position to explore strategic alternatives including evaluating any proposals made to purchase Vitran,” said William Deluce, interim president and CEO. Vitran would like to take its time.