McLean family puts Trailer Bridge stock sale on hold
The family of containerization pioneer Malcom McLean have put on hold plans to sell its stake in Trailer Bridge, the U.S. mainland/Puerto Rico shipping company.
The company said in a statement Thursday afternoon that a “committee formed to explore strategic alternatives is suspending its active review in light of a Justice Department antitrust investigation into pricing practices among Puerto Rico carriers” that was revealed last month.
It added the committee had “consulted with the McLean family and with the committee’s financial advisor, Jefferies & Co. Inc., and determined that the investigation would result in a less robust process.”
Last November, the McLean family said it planned to sell its 48.9 percent stake in the company. Malcom P. McLean Jr., one of the McLean family group members, and his brother-in-law, Greggory B. Mendenhall, serve on the Trailer Bridge’s board of directors.
Trailer Bridge said it had met with Justice Department attorneys involved in the Puerto Rico pricing probe, and has received a subpoena seeking certain documents and information, but had not been served with a search warrant.
It said it had pledged “full and complete cooperation” with the investigation, and said it intends to “defend vigorously the parallel private actions.” Last week a class action lawsuit was filed against Trailer Bridge and other carriers in the Puerto Rico trade — Horizon Line, Sea Star and Crowley Maritime.
Trailer Bridge said it believes those actions are “totally without any merit.”
The investigation has surprised many since the U.S. mainland to Puerto Rico trade is thought to be one of the most competitive of the cabotage trades. Trailer Bridge has reported a net loss in each of the past two years and Horizon Lines said in its most recent quarterly report with the Securities and Exchange Commission that it “continues to experience extremely soft market conditions in Puerto Rico, stable market conditions in Hawaii and favorable market conditions in Alaska.”
“We do not engage in illegal pricing practices,” said John D. McCown, the company’s chairman and chief executive officer. “Our different assets give us various cost advantages, and we have and will continue to leverage all of those differences to build volume and market share.”
The creation of Trailer Bridge in 1992 was act four in Malcom McLean’s long transportation career. After starting McLean Trucking in the 1940s, he founded the first container shipping company Sea-Land Service in the 1950s and sold it to R.J. Reynolds in 1969. He remained with the company either as an executive or board member until 1977. In 1978 he purchased United States Lines, but that company filed for bankruptcy in 1986.
At age 79 he started Trailer Bridge, which uses offers barges to move cargo between Jacksonville and San Juan and now has a 14 percent market share in the trade. ' Chris Dupin
McLean family puts Trailer Bridge stock sale on hold
