Apollo wins round in buyout battle

Following bidding wars, sharp words and a lawsuit, the board of Houston-based EGL has found Apollo’s most recent, $1.8 billion offer to be superior to a previously agreed buyout led by EGL’s CEO James Crane and backed by Centerbridge. The CEO-led group now has through Friday to revise its bid.

Apollo Management has scored a victory in its ongoing fight for transport and logistics firm EGL.

The New York-based firm’s fourth, all-cash $1.8 billion bid for the Texas-based company was found to be superior to an existing leveraged buyout approved by EGL’s board 19 March. Apollo is offering $43 per share for the firm, which it wants to combine with a similar portfolio company, CEVA Logistics.

The previously agreed bid – led by EGL’s largest shareholder, chief executive and chairman, James Crane, and backed by Centerbridge Capital Partners and The Woodbridge Company – had been increased to $38 per share from the Crane-led group’s $36 per share offer in February.

Crane’s group now has through Friday to renegotiate a deal; should Apollo’s offer still be considered superior after the Friday deadline, the CEO-led consortium would have its agreement terminated and be paid a $30 million break-up fee, EGL said in a statement.

Observers have speculated that the break-up fee could be annulled by a Texas court, should Apollo win a case it filed against EGL, Crane, and EGL executives. The lawsuit alleges Apollo was shut out of a “sham” bidding process fixed to favour the CEO’s consortium and highlighted the 2 percent termination fee as an “unconscionable” attempt to “lock-up” the transaction.

Crane, who founded EGL in 1984, has called Apollo’s allegations “pretty bogus”.