USA Truck of Van Buren and its two largest shareholders have agreed to register up to 2 million shares of the company for sale.
In the agreement, USA Truck (Nasdaq: USAK) pledged to nominate Vadim Perelman, Thomas Glaser and Gary Enzor for re-election to the company’s board of directors. Perelman is the founder and manager partner of Baker Street Capital Management, which owns 1.4 million (13.3 percent) shares of USA Truck.
Baker Street and Stone House, which owns 1.55 million (14.7 percent) shares, formed a group called United Shareholders for the Benefit of USAK in May 2014 and had Perelman and Glaser, a former USA Truck executive, named to the board. Enzor, CEO of Quality Distribution Inc. of Tampa, joined the board in September 2014.
USA Truck CFO Michael Borrows said Baker Street and Stone House are in the process of separating from the United Shareholders group. He declined to give the breakdown of how many shares each group would contribute to the 2 million shares for sale.
The agreement states that if Baker Street shares sell and bring its holdings in the company to less than 10 percent then Perelman would resign from the board. Stone House and Baker Street agreed to vote according to the board’s recommendations in the next two shareholders’ meeting with exceptions for special situations.
Borrows said USA Truck stock, which closed at $31.13 per share Wednesday, is lightly traded at 40,000 to 60,000 shares per day, and the company believes a directed mass sale of shares would be less volatile on the share price than a drawn-out process. Borrows said an investment banker would handle the transaction but that process has not started yet.
Baker Street bought its shares in November 2013 when the price hovered around $13, while Stone House purchased it shares in multiple transactions with the price fluctuating in the mid-teens.
"We believe this will allow us to preserve the stability of the USA Truck board while the Company continues to execute its turnaround plan and more fully realizes the potential of its business model," said USA Truck Chairman Robert Peiser in a statement. "In addition, we believe that providing the flexibility for Baker Street and Stone House to reduce their positions in the future in an orderly manner, would best serve the interests of all USA Truck stockholders."
Mark Cohen of Stone House said the investment group was supportive of USA Truck but, because of the share price increase, Stone House wanted "flexibility to trim our holdings in the future."