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On September
17, 2007, the Company entered into an Agreement and Plan of Merger with
Mainfreight Limited and Saleyards Corp., a Delaware corporation and wholly
owned subsidiary of Mainfreight
Limited. We refer to the Agreement and
Plan of Merger as the “Merger Agreement” and to the merger contemplated by
the merger agreement as the “Merger.”
Upon the effective time of the Merger, each outstanding share of the
Company’s common stock (other than shares owned by Mainfreight Limited, the
Company or any of their respective subsidiaries or any shares for which
appraisal rights have been perfected) will automatically convert into the
right to receive $2.50 per share in cash, without interest, each share of the
Company’s Class F Preferred Stock will automatically convert into the right
to receive $62.50 per share in cash (the equivalent of $2.50 per share of
common stock multiplied by 25, which is the number of shares of common stock
into which each Class F share may be converted), without interest, and the
Company will become a wholly owned subsidiary of Mainfreight Limited.
The purpose of
the acquisition of the Shares is to enable Mainfreight Limited to acquire
control of, and the entire equity interest in, the Company. The purpose of the Merger is to acquire all
issued and outstanding shares of the Company not purchased under the Stock Purchase
Agreement.
If the Merger is
completed, Mainfreight Limited will own 100% of the Company’s equity, and
will be entitled to all of the benefits resulting from that ownership. These
benefits include complete control of the Company and entitlement to any
increase in its value. Similarly, Mainfreight Limited would also bear the
risk of any losses incurred in the operation of the Company and any decrease
in value of the Company.
The Company’s
board of directors has fixed the close of business on September 17, 2007 as
the record date (the “Record Date”) for the determination of stockholders
entitled to vote on the Merger Agreement and Merger, and to notice of the
action approving the Merger Agreement and authorizing the Merger. On that date, there were outstanding
18,076,735 shares of the Company’s common stock, exclusive of shares held in
the Company’s treasury, and 122,946 shares of the Company’s Class F preferred
stock.
Each record holder of shares of common stock on the Record Date is
entitled to one vote for each Share held, and each record holder of Class F
shares of
preferred stock
on the
Record Date is entitled to 25 votes for each Class F share held, on all
matters to come before the stockholders for approval.
Under Section
251 of the DGCL, the affirmative vote of the holders of a majority of the
outstanding shares of the Company’s voting stock is required to approve the
Merger Agreement and the Merger. On
September 17, 2007, three stockholders that, in the aggregate, are the record
owners of 10,978,853 shares of common stock and all of the Class F shares,
representing in the aggregate approximately 66.4% of the outstanding voting
power of the Company, executed and delivered to the Company written consents
authorizing and approving the Merger Agreement and the Merger.
Accordingly, the
Merger has been approved by holders representing approximately 66.5% of the
outstanding voting securities of the Company.
As such, no vote or further action of the stockholders of the Company
is required to approve the Merger.
However, under Delaware law, the Merger will not be effective until at
least 20 calendar days after the
Information
Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934,
as amended, (the “Information Statement”)
has first been sent to
stockholders.
The Merger Agreement provides that the directors of Saleyards Corp.
immediately prior to the effective time of the Merger shall be the directors
of the Company until the earlier of their resignation or removal or the
election of their successors, and that the Company shall cause all directors
of the Company to resign immediately prior to such effective time. The Merger Agreement also provides that the
officers of Saleyards Corp. immediately prior to the effective time of the
Merger shall be the officers of the Company until the earlier of their
resignation or removal or the election of their successors.
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