Swift Transportation Co (NYSE:SWFT) Investor Lawsuit Over Alleged Wrongdoing In Acquisition By Knight Transportation, Inc File

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Company Name(s): 
Swift Transportation
Case Name: 
Swift Transportation Deal Case 06/12/2017
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: SWFT
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
06/12/2017
Summary: 

June 12, 2017 (Shareholders Foundation) - An investor, who currently holds shares of Swift Transportation Co (NYSE:SWFT), filed a lawsuit in effort to halt the proposed takeover of Swift Transportation Co. by Knight Transportation, Inc for a value of approximately $22.07 per NYSE:SWFT share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:SWFT stockholders by agreeing to sell Swift Transportation Co cheaply via an unfair process to Knight Transportation, Inc.

On April 10, 2017, Knight Transportation, Inc. (NYSE:KNX) and Swift Transportation Co (NYSE:SWFT) announced that their boards of directors have approved a merger of Knight and Swift Transportation Co (NYSE:SWFT) in an all-stock transaction that will create the industry's largest full truckload company. Under the terms of the definitive agreement each Swift Transportation Co (NYSE:SWFT) share will convert into 0.72 shares of Knight-Swift by means of a reverse stock split. Each share of Knight Transportation, Inc will be exchanged for one Knight-Swift share. Based on the $30.65 closing price of Knight Transportation, Inc shares on April 7, 2017, the last trading day prior to the announcement, the implied value per share of Swift Transportation Co (NYSE:SWFT) is $22.07.

However, plaintiff claims that the proposed consideration NYSE:SWFT shareholders will receive is grossly inadequate and undervalues Swift Transportation Co. Indeed, at least one analyst has set the high target price for NYSE:SWFT shares at $30.00 per share and NYSE:SWFT shares traded in the open market at high as $25.82 per share in December 2016.
In addition, the plaintiff alleges that the process is also unfair NYSE:SWFT stockholders. Indeed, the Jerry Moyes family, which holds approximately 56 percent of the Swift Transportation Co (NYSE:SWFT) voting power, and Kevin Knight and Gary Knight, who hold approximately 10 percent of the Knight voting power, have already agreed to vote their shares in favor of the transaction.