by Marty Cook
Posted 4/10/2014 10:53 am
Updated 6 months ago
USA Truck of Van Buren said Thursday that it will end its shareholders rights plan at the end of business Friday.
The publicly traded trucking company adopted the plan in November 2012 to protect itself from hostile takeover bids while the company attempted a turnaround.
The so-called "poison pill" provision would have kicked in when an investor obtained more than 15 percent of USA Truck stock and allowed other shareholders to purchase an additional $24 worth of shares at a 50 percent discount.
"We’re pulling it down," Cliff Beckham, the company’s CFO, told Arkansas Business. "It has served its purpose. It protected shareholders from being robbed."
The plan was scheduled to run until November 2014 unless shareholders voted to extend it at the firm's annual meeting in May. The USA Truck board of directors decided to end the plan in a vote announced Thursday.
USA Truck stock (Nasdaq: USAK) closed at $15.82 on Wednesday and was up more than five percent Thursday after the announcement of the plan’s early termination.
"With the turnaround well underway, and with our stock price having appreciated well above the price existing at the time of the Plan’s adoption, the Plan has served its intended purpose," board Chairman Robert A. Peiser said in a statement. "The Board’s decision to terminate the Plan demonstrates our confidence in the Company’s management team, ongoing strategy and employees."
Officials said they knew of no pending takeover bid when the firm adopted the plan in 2012. But in September 2013, Knight Transportation Inc. of Phoenix announced it had offered $9 a share and the assumption of $147 million in debt to take over the company. USA Truck rejected the offer.
At the time of Knight’s announcement, USA Truck shares were trading at $6.46. Knight soon increased its holdings to 1.3 million shares, or 12.4 percent of the company.
USA Truck filed a lawsuit against Knight that was settled in February when Knight ended its takeover attempt. As part of the settlement, Knight agreed to not acquire any more shares until September and to vote its shares according to the board of directors' recommendations at the May meeting.
While USA Truck was holding Knight at bay, two other investors bought large amounts of USA Truck stock, while staying below the 15 percent threshold. Stone House Capital owns 1.5 million (14.7 percent) shares and Baker Street Capital owns 1.4 million (13.3 percent).