by Lance Turner
Posted 5/23/2013 10:39 am
Updated 10 months ago
James Welch, CEO of YRC Worldwide Inc., says he's done talking about his firm's offer to take over ABF Freight Inc., the largest subsidiary of Arkansas Best Corp. of Fort Smith.
This, according to a report today in the Kansas City Star. Welch made the remarks during the Wolfe Trahan & Co. global transportation conference today in New York:
"There’s been so much said and written about that. There's not much left to comment on," Welch told an audience of investors Thursday in New York.
And then he said he would not comment.
Arkansas Business wrote about the offer, which Arkansas Best disclosed in a filing with the U.S. Securities and Exchange Commission, two weeks ago. Arkansas Best rebuffed the proposal and hasn't mentioned it since. There was no discussion of YRC's proposal at Arkansas Best's annual meeting on Tuesday.
Welch's silence on the matter isn't surprising. Word of the proposal sent trucking analysts into a fit. The Motley Fool cited to the two firms' market capsand compared YRC buying ABF to Jonah swallowing the whale. The Star quoted analyst Art Hatfield of Raymond James & Associates saying he didn't believe the bid was serious given YRC's financial situation.
(You'll remember that the firm narrowly avoid bankruptcy 2009 after reaching a deal on labor costs with the Teamsters union -- a deal that's been a source of legal wrangling between YRC and Arkansas Best.)
"YRC’s balance sheet couldn’t handle more debt, so I don’t know what they’re thinking in that regard, Hatfield told the newspaper. "It just doesn’t make any sense."
Teamsters President James P. Hoffa even weighed in, pointing out the awful timing for a such proposal, made while Arkansas Best was working on the final details of a new contract with the union:
Before YRC begins looking for acquisition targets they should first restore our members' wages and pension contributions. We have seen this kind of arrogance from YRC before. We thought they had finally learned the lessons of past management catastrophes. Unfortunately it appears they have not. We want to give credit to ABF for rejecting this gambit, and we now will demand from YRC a full accounting of the calculations and decisions that went into their latest misstep.