Apollo Management seeks to acquire EGL, Crane offer still on the table, Ramius weighs in

By Lisa Kerner

Charlotte, N.C., March 20 - EGL, Inc.'s board of directors received a written proposal from Apollo Management LP to acquire the company for $40.00 per share, conditioned on expedited confirmatory due diligence.

The board's special committee considers the March 19 proposal an alternative to that of EGL chairman and chief executive officer James R. Crane and affiliates.

Apollo may conduct due diligence and Crane's parties have been notified of this latest proposal, according to a company news release.

Crane, senior management and investment firms Centerbridge Partners, LP and The Woodbridge Co. Ltd., submitted a proposal to acquire all of the outstanding common stock of EGL for $36.00 per share in cash on March 1.

Debt financing of $1.175 billion has been committed to fund the transaction from Merrill Lynch, Pierce, Fenner & Smith Inc. and Woodbridge.

EGL shareholders Admiral Advisors, LLC, an affiliate of Ramius Capital Group, LLC, responded to the news of Apollo's offer, saying it had "significant reservations about the events which appear to have transpired in connection with the company's purported sale process."

As of March 21, Ramius owned 1.18 million shares, or 2.9%, of EGL's outstanding shares.

"While we recognize that this is a complex situation, we were shocked to learn in a report by Reuters released just hours after EGL announced that it had accepted Mr. Crane's management-led buyout at $38 per share that Apollo had submitted a $40 per share offer," the investor wrote in a letter to EGL and included in a company news release.

The Ramius affiliates said shareholders would not tolerate any violation of the board's fiduciary duties if Apollo's claims that its efforts to obtain information for diligence were ignored.

"Simply put, under the current set of circumstances, the board must take whatever actions are necessary to allow the two interested parties, or any other interested parties who might make an offer which could result in a superior proposal, to make their highest and best offer for EGL, without any interference or undue influence from the board or management," the letter stated.

Houston-based EGL is a global transportation, supply chain management and information services company.

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