Shareholder revolts against EGL sale

Shareholder revolts against EGL sale A shareholder in Eagle Global Logistics has filed suit to prevent the board from going ahead with a proposed buyout by James Crane, EGL’s chairman and chief executive officer, and two private investment groups.
   Federated Kaufman Small Cap Fund, a New York-based mutual fund that owns 900,000 shares of EGL, said in a complaint filed last week in Harris County, Texas, District Court that the board rushed to accept Crane’s offer of $38 per share ($1.7 billion) knowing that another equity fund, Apollo Management, was about to make a higher offer. The day after EGL accepted the takeover offer from Crane’s consortium, which includes Centerbridge Partners, Apollo said it would pay $40 per share for the company.
   The complaint alleges that the bidding process was cut off prematurely in order to favor Crane's acquisition of the company, in violation of fiduciary duties owed by EGL's directors to its shareholders. It also alleges that the directors' approval of a $30 million windfall termination fee plus $15 million in transaction expenses to be paid by EGL to Crane in the event that Apollo were to acquire EGL, was wrong, according to a statement issued by Federated Kaufman’s legal advisor.
   EGL has said its special committee of the board of directors is considering the Apollo proposal.