EGL chairman and CEO Jim Crane’s proposed private equity-financed buyout of Houston-based EGL, Inc is generating some interesting bidding action.
In an unusual move for a private-equity firm, Apollo Management LP sued EGL, Crane and the EGL board on Tuesday in Houston in an attempt to block the proposed sale of the company to Crane’s group and to seek access regarding due diligence inforamation that it contends that the company has refused to divulge to Apollo. At the same time, Apollo also raised its buyout offer by $1 a share to $41.
In a letter sent on Tuesday to a special committee of EGL’s board, Apollo complained that Crane had meddled in the sale process and said that the suit was an action “unprecedented in the almost 20-year history of our firm.” The new Apollo offer, valued at $1.9 billion, tops a $38-a-share bid from Crane’s group that the company accepted last week. It is conditioned on access to the information demanded in the suit and the elimination of a $30 million breakup fee that is a part of the Crane-led deal. Apollo contends that it is interested in EGL so it can combine the Houston-based company with another logistics company that it owns, CEVA Logistics.
Given that EGL’s stock price has increased by over 30% since Crane’s initial management-led bid for the the company spurred all this bidding, I wonder what Ben Stein would say about that?