www.tigris.com/downloads/2003_07_08_dj_newswires.html -
[Cached Version]
Published on: 1/30/2003
Last Visited: 2/11/2004
Bill Zollars, chief executive of Yellow, said the timing is right for the takeover because the economy is on the verge of a rebound, the debt markets are attractive, and Yellow recently signed a five-year contract with the Teamsters.
"We have two companies operating well at this time, and it's always best to do things when you don't have to do them," said Zollars, who will become chief executive of the combined company Yellow-Roadway.
...
Still, Zollars said he thinks the $48-a-share price is fair, and that Roadway has been undervalued.There weren't any other bidders.
It's not yet clear how Yellow will finance the purchase.Zollars said the company will take on a total of $500 million in new debt.He said Yellow may issue new shares or tap the debt markets for financing.Deutsche Bank AG (DB) is advising Yellow on the deal, and CS First Boston is advising Roadway.
Zollars said he expects to close the deal by the end of this year, with the regulatory review taking about six months or less.Zollars said that despite Yellow's dominance of the less-than-truckload market, gaining regulatory approval shouldn't be a problem, as the company's presence in the overall trucking market is around 1%.
...
Zollars doesn't plan to change Roadway's operations just yet, limiting the impact of the merger on the industry.
"We're going to be competing with each other in the market place as we have been," Zollars said."We really don't know as much as we need to know about how Yellow and Roadway are successful."
He said the companies haven't done any studies to find out why customers choose one over the other, and so it's too early to know how to position the two brands.He said that around 30% of the companies' customers overlap.
For the short term, the companies will only combine their back-office tasks, which should save the combined company around $125 million a year within five years.Zollars said that around 2% of the back-office staff will be cut.