[Copperhead]

It is relatively easy for publically traded companies to be "bought" by another company. Swift could easily buy a portion of Werner, or visa versa, by just buying up a large chunk of the publically traded stock. You don't have to buy equipment to buy a company. When a company buys another, they are not interested in the day to day running of tractors and trailers, they are interested in controlling customer bases and direction the company operates. The more stock you control, the more you can manipulate the operation of a company. If true that Swift bought into Werner, I would bet that Swift could care less about tractors and trailers.

[AC120]

This fanciful tale--that Swift is buying Werner or buying part of Werner--has been circulating for years. I first heard it in 1992. But ask yourself: if--IF!--it were true, how would "another Swifty" be privy to the info? Management would announce it. Financial sources, the ATA, and trucking magazines would take note. "Swifties" would get a Qualcomm message.

Bear in mind that Swift is not publicly traded and hasn't been since 2007. Stock was sold between 1990 and 2007. Swift Transportation is highly leveraged, which means it owes money. Werner (NADAQ:WERN if you want to look it up) is debt-free. Do you think that an outfit that is in debt is going to buy one that isn't? The story makes as much sense as "I did 80+ MPH in my Swift trainer truck while the trainer was asleep."

Just for grins, here's another story that circulated in the early 90's: JB Hunt (Old man Hunt) was caught banging his secretary on his desk. In one variation, his wife caught them and threatened to shoot them. In another, she joined them on the desk. This meant (somehow) that JB Hunt (the man) was ruined and was going to sell his company for pennies on the dollar to Jerry Moyes. If you believe stuff like this, you'll believe anything.

[jburd]

Well I asked the guy who told about the buy into Werner and he said Swift bought the son's interest in the company and that the old man ws still hanging on to his part.

[jonp]

Originally Posted by AC120

This fanciful tale--that Swift is buying Werner or buying part of Werner--has been circulating for years. I first heard it in 1992. But ask yourself: if--IF!--it were true, how would "another Swifty" be privy to the info? Management would announce it. Financial sources, the ATA, and trucking magazines would take note. "Swifties" would get a Qualcomm message.

Bear in mind that Swift is not publicly traded and hasn't been since 2007. Stock was sold between 1990 and 2007. Swift Transportation is highly leveraged, which means it owes money. Werner (NADAQ:WERN if you want to look it up) is debt-free. Do you think that an outfit that is in debt is going to buy one that isn't? The story makes as much sense as "I did 80+ MPH in my Swift trainer truck while the trainer was asleep."

Just for grins, here's another story that circulated in the early 90's: JB Hunt (Old man Hunt) was caught banging his secretary on his desk. In one variation, his wife caught them and threatened to shoot them. In another, she joined them on the desk. This meant (somehow) that JB Hunt (the man) was ruined and was going to sell his company for pennies on the dollar to Jerry Moyes. If you believe stuff like this, you'll believe anything.

Can a company with debt buy one without? Of course it can. Thats what leverage is about. How better to bolster your sheet than to add a cash cow to it? Also, if Swift was intending to take a majority interest in Werner or any public company then it has to file a notice of intent with the SEC.

[AC120]

Actually, leverage is about using borrowed money, which would mean increased debt for Swift. In 2005, Moyes leveraged his buyout of Swift stockholders to the tune of $2.74 billion, PLUS an additional $332 million in Swift debt (that's three billion borrowed dollars). I have no idea what debt service on principal, interest, and fees is costing him every year, but it's a huge chunk of what comes in--hard to see him adding to that burden. If Moyes can get his hands on money that easily these days, I'd like to see him restore the pay and benefits he cut in April.

Re: cash cow. I don't see that. The increased costs of getting a part of Werner by borrowing money would eat up the cash and the cow. It's a lot harder to get money these days than it was when Moyes took Swift private.

In contrast, Werner Enterprises doesn't even have to think about debt service. By the way, CL Werner has four sons who are with him in the business and the family owns about 40% of the company. I doubt that one of Werner's sons would sell his shares to Moyes and not to his own family.

Again, it sounds like the Swifty who told the story to jburd was just recycling old gossip and blowing smoke.

[jonp]

Originally Posted by AC120

Actually, leverage is about using borrowed money, which would mean increased debt for Swift. In 2005, Moyes leveraged his buyout of Swift stockholders to the tune of $2.74 billion, PLUS an additional $332 million in Swift debt (that's three billion borrowed dollars). I have no idea what debt service on principal, interest, and fees is costing him every year, but it's a huge chunk of what comes in--hard to see him adding to that burden. If Moyes can get his hands on money that easily these days, I'd like to see him restore the pay and benefits he cut in April.

Re: cash cow. I don't see that. The increased costs of getting a part of Werner by borrowing money would eat up the cash and the cow. It's a lot harder to get money these days than it was when Moyes took Swift private.

In contrast, Werner Enterprises doesn't even have to think about debt service. By the way, CL Werner has four sons who are with him in the business and the family owns about 40% of the company. I doubt that one of Werner's sons would sell his shares to Moyes and not to his own family.

Again, it sounds like the Swifty who told the story to jburd was just recycling old gossip and blowing smoke.

I'm well aware of what an LBO is. I was speaking in the broader sense here as Moyes, unless he did a massive stock placement to raise the cash thereby taking his company public he has to borrow the money or he could use an investment bank to borrow on Werner to help buy it. If the service on the resulting debt is less then the cashflow = cashcow or at the least a source of revenue to pay down his own debt while gaining him a greater footprint in the otr market. That makes sense to me. He would add a debt free source of cash to pay his own debt down. Read "Barbarians At The Gate"
If the family owns 40% then that leaves 60% dosn't it. All moyes has to do is get 41% to overide the 40.

[jonp]

Also, I agree with you about blowing smoke. This sounds like another driver rumor to me although with a public company you never know. It could happen.

[VPIDarkAngel]

Originally Posted by jburd

yeah Bumper,I heard it was his daught...so daughter or son inlaw it's all the same.Jerry's son has Central freight or a majority.All in the family.I reckon that's the way to go.

Rumors are everywhere and they change a little every time they're passed along.
Sooooooooo anyway I heard about the buyout or partial of Werner from another Swifty.

Central Freight (the o/o trucks pulling doubles), or Central Refrigerated (the black, white, and red trucks pulling reefers)?

[AC120]

Originally Posted by jonp

I'm well aware of what an LBO is. I was speaking in the broader sense here as Moyes, unless he did a massive stock placement to raise the cash thereby taking his company public he has to borrow the money or he could use an investment bank to borrow on Werner to help buy it. If the service on the resulting debt is less then the cashflow = cashcow or at the least a source of revenue to pay down his own debt while gaining him a greater footprint in the otr market. That makes sense to me. He would add a debt free source of cash to pay his own debt down. Read "Barbarians At The Gate"
If the family owns 40% then that leaves 60% dosn't it. All moyes has to do is get 41% to overide the 40.

:-) We're on the same page. "Barbarians At The Gate" has been on my reading list for years. Thanks for the heads up on it--I'll get a copy. I'll bet Moyes would LOVE to get his hands on that 60%. Here come the Swift-Werner jokes! I can't think of any right now. But . . . ah, you know the stuff we all hear out here.

[Copperhead]

Originally Posted by AC120

Bear in mind that Swift is not publicly traded and hasn't been since 2007.

I thought the original post was about Swift buying into Werner, not the reverse. Swift not being publically traded would be a non issue. Werner is publically traded. The Werner family may have 40% ownership of stock being traded, but that leaves 60% for others. Could care less if Swift or the Caliph of Baghdad buys up those shares. Just stated that a publically traded company always runs the risk of having an outside entity, that doesn't have their best interests at heart, buy up a controlling interest and influencing business decisions.