Forward Air Faces Shareholder Revolt Over Omni Merger

Forward Air's turbulent merger with Omni Logistics has taken a new turn. Shareholders are filing a class action complaint in a Tennessee court, alleging they were denied a vote on the $2.1 billion deal.

This merger, down from the original $3.2 billion valuation, has sparked a significant backlash due to the dramatic fall in Forward Air's share price and the complexities surrounding voting rights.

Forward-Omni Merger Reaches Conclusion

After legal disputes, Forward Air closes the Omni Logistics acquisition for $2.1B. Details on the revised deal and shareholder impact.

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The Legal Battle

Shareholders argue that the company’s board intentionally structured the merger to avoid a shareholder vote. The complaint states, “The Director Defendants intentionally and manipulatively structured the Merger for the sole purpose of depriving Forward Air’s shareholders of the opportunity to vote on it.”

• Shareholder Plaintiffs: Cambria County Employees Retirement System and former senior VP Michael Roberts lead the lawsuit.
• Share Price Drop: Shares plummeted from $110 pre-announcement to just $14 recently.

Merger Controversies

Forward Air initially tried to back out of the deal, accusing Omni of financial misrepresentations. However, a court settlement forced the merger through.

• Debt Load: Forward Air closed Q1 with $1.77 billion in debt and a net debt-to-adjusted EBITDA ratio of 5.5 times.
• Board Control: Omni’s private equity backers gained significant control with three board seats.

Forward Air & Omni Logistics: Merger Drama

Are you paying attention to the issues unfolding with Forward Air & Omni Logistics merger deal? With legal battles and shareholder disputes, we’ve got the rundown.

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Leadership Transition

In the midst of this turmoil, Forward Air announced a significant leadership change. Jamie G. Pierson has been appointed interim Chief Financial Officer, succeeding Rebecca Garbrick, effective May 20, 2024. Garbrick, who has been with the company since 2020, will stay on temporarily to assist with the transition.

Mr. Pierson joins Forward having most recently served as Chief Financial Officer of MV Transportation, a privately-owned passenger transportation contracting services firm in North America, until January 2024. Prior to joining MV Transportation, Mr. Pierson held various senior leadership positions including Executive Vice President and Chief Financial Officer of Ecobat Technologies and YRC Worldwide, Inc. – BusinessWire

What’s Next?

Shareholders will vote on converting preferred shares into common shares, a move seen as critical to avoid hefty dividend payments. Forward Air’s financial stability and shareholder trust hang in the balance.

• Future Outlook: The company plans to reduce its debt leverage to 4.5 times by the end of 2025.
• Potential Impact: The ongoing legal and financial challenges could reshape the company's strategy and governance.

Source: FreightWaves