Investment firms are voicing opposition against Omni Logistics’ attempt to merge with Forward Air.
Forward Air shareholder Ancora Holdings Group’s opposition to a merger with Omni Logistics prompted an intimidation campaign by the spurned company, “unleashing an army of aggressive law firms” in a desperate attempt to complete the deal, the shareholder said in a letter last week.
“Ancora does not take to intimidation tactics kindly,” the Nov. 16 letter to Omni said. “Subpoenas and document requests ... will not deter us from continuing to vocalize our views as to why terminating the prospective deal with Omni is both a logical and necessary step at this time.”
The planned merger’s terms are one-sided and “would saddle Forward Air with $1.85 billion in incremental debt,” the Mayfield Heights, Ohio-based investment firm also said in the letter.
Omni Logistics restated its commitment to the deal in a letter to Forward Air shareholders Friday.
“This transaction is the best answer for customers, and that is worth fighting for,” the Omni letter said. “We are not looking for a quick exit. The transaction is not for cash — it is for equity in the go-forward combined company.”
That followed a statement by Omni released Nov. 13 in response to Forward Air’s filing of a counterclaim, which argued Omni was in breach of the agreement for failing to meet obligations of the deal.
Omni in late October filed a lawsuit against Forward Air with the goal of forcing the carrier to proceed with the merger. It claims it has met all the obligations of the merger agreement.
Gregeory Lafin, managing director at Wipfli Corporate Finance Advisors, told Trucking Dive in an email on Monday that Omni’s performance may have dipped or something else surfaced as the process progressed as potential drivers behind Forward Air’s reconsideration of the deal.
“This can usually be solved by a purchase price adjustment or structure change negotiated by the parties,” Lafin wrote. “Alternatively, strategic direction at Forward Air may have changed and an acquisition may not be appropriate for them to embark on at this time.”
Another major Forward Air shareholder, New York-based equity management firm ClearBridge Investments, also has spoken against the merger.
Clearbridge in its statement said, “simply put, this acquisition appears too big and too complicated. We urge the Board and management to outright cancel the transaction.”
