Crane alleges EGL bid undermined by insider leaks
CEVA Logistics denied a claim that it was assisted in its winning bid to acquire Houston-based EGL Inc. by an insider in the rival group seeking to take the company private, as alleged last Thursday by the losing management consortium.
EGL Chairman and Chief Executive Jim Crane, who led the management team and two investor groups seeking to acquire Eagle Global Logistics, charged in a Securities and Exchange filing last Thursday that Joseph Bento, president of North America operations and chief marketing officer, “secretly and improperly” cooperated with private equity firm Apollo Management, which owns CEVA and last week won the bidding war for the freight forwarding and logistics company with an offer of $2 billion.
The Crane group said it had reliable information showing that after it submitted its initial offer to acquire EGL, Bento shared confidential information related to the group’s bidding strategy and other details with Apollo. The losing bidders said they would pursue available legal remedies against Bento.
“The statements made in Mr. Crane’s 13D filing regarding allegations of improper conduct by Mr. Bento are entirely untruthful and inaccurate and have no basis in fact. Since CEVA made its original offer and became involved in the EGL sale process, Mr. Bento, along with the entire EGL management team, has actively and properly assisted CEVA in its diligence and negotiations, as sanctioned and supported by EGL’s Special Committee. The statements in the 13D filing regarding Mr. Bento and any improper interaction with the CEVA bidding group are simply untrue,” CEVA said in a statement.
Bento was not included in the Crane group’s most recent offers for EGL.
The Apollo-CEVA offer of $47.50 per share represents a 30 percent premium above Crane’s original offer in January. Some shareholders protested the EGL board’s quick acceptance of the Crane offer without exploring other potential offers. Those actions slowed the process down and enabled Apollo to submit a higher bid.
The Crane group will receive $30 million from EGL for terminating the original merger agreement.
CEVA is registered in the United Kingdom and has operational headquarters in The Netherlands and Jacksonville, Fla.