General Atlantic backs out of equity bid for EGL
A management bid to acquire Eagle Global Logistics and take it private appeared to founder Wednesday after the private equity firm backing the deal withdrew its support after an unexpected shortfall in EGL's fourth-quarter results.
General Atlantic and EGL senior management, led by Chairman and Chief Executive Officer Jim Crane, were prepared to invest $75 million in the $1.2 billion offer, with the bulk of the financing arranged by major banking firms. Crane, the company's largest shareholder, offered EGL $36 per share.
Crane informed the board of directors that he intends to pursue another private equity firm to replace General Atlantic and make a revised offer in the future, EGL said in a statement.
EGL expects to release fourth quarter results on Feb. 28. The Houston-based logistics provider said results would be negatively impacted by an 8 percent decline from the same 2005 period in revenue per shipment at the company's domestic freight forwarding division due to a greater proportion of deferred heavyweight airfreight and residential shipments during the traditional peak-shipping season. For the quarter, total domestic shipments increased about 8 percent year over year. EGL said it also expects its results to be impacted by higher than anticipated operating expenses.
EGL's shares fell 18 percent to $31.04 after news that General Atlantic had withdrawn from the deal.
EGL's shares closed at $29.78 on Dec. 29, the day Crane's group made its purchase offer.
General Atlantic backs out of equity bid for EGL
