YRC rebuffed in move to acquire ABF, ABF's parent says
Two CEOs met in late March to discuss possible transaction.
Less-than-truckload carrier YRC Worldwide, Inc. approached Arkansas Best Corp., the parent of ABF Freight System, Inc., in late March with an interest in buying the Arkansas Best LTL unit, but was subsequently rebuffed, Arkansas Best said tonight.
In a statement e-mailed to DC Velocity, Arkansas Best said YRC expressed an interest in "exploring an acquisition of ABF," which accounts for about 80 percent of Arkansas Best's total business. YRC CEO James L. Welch met March 22 with Arkansas Best President and CEO Judy McReynolds at Arkansas Best's headquarters in Fort Smith, Ark., to discuss a possible business combination.
However, Arkansas Best told YRC in early April that a "transaction with YRC was not appropriate at that time," Arkansas Best said in the statement. ABF said it was too focused on contract negotiations with the Teamsters union, as well as "other strategic and operational initiatives" to seek an involvement with YRC at the time, according to the Arkansas Best's statement.
Arkansas Best has not held subsequent discussions with YRC, the Fort Smith, Ark.-based company said.
A copy of the statement is also being filed with the Securities and Exchange Commission.
In a March 25 letter to McReynolds, Welch wrote that YRC's board and management is "very supportive of our desire to work with ABF in an attempt to move a transaction forward. We think our indication of consideration is appropriate and meaningful for the shareholders of ABF."
The letter's contents contained no details about what a possible combination might look like. Welch told McReynolds that YRC "has spent a considerable amount of time thinking about both the strategy and strategic initiatives for our company." He provided no specifics in the letter.
A representative of Overland Park, Kan.-based YRC was not available to comment.
Last Friday, ABF and national leaders of the Teamsters union agreed on a tentative five-year labor contract. The agreement must still be approved by leaders of Teamster locals representing about 7,500 rank-and-file workers, and then by the rank-and-file itself.More articles by Mark B. Solomon
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