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Update 9:20pm: Adds company comment.
Logistics services provider Forward Air (NASDAQ:FWRD) rose 4% as activist investor Ancora Holdings argued that the company should terminate its planned purchase of Omni Logistics.
Ancora Holdings, which has been an investor in Forward Air since mid-2020, argues that the Omini acquisition was “intentionally” structured to avoid a pre-closing shareholder vote.
The Omni deal “introduces substantial earnings quality risk given a significant portion of its EBITDA is addback-related,” Ancora detailed in a presentation given at the 13D Monitor Active-Passive Summit in NYC on Tuesday.
The Ancora presentation comes after Forward Air (FWRD) announced the Omni acquisition on Aug. 10, sending the company’s shares plunging 25% on Aug. 11 and prompting at least three Wall Street downgrades at the time.
Ancora highlighted that there’s a “high” probality that a court will rule in favor of a plaintififfs lawsuit filed late last month that will require Forward Air (FWRD) to hold a pre-closing holder vote on the Omni deal.
Forward Air (FWRD) said it’s aware of the Ancora presentation.
“Forward is aware of Ancora’s presentation today,” a company representative said in a statement to Seeking Alpha. “We are in regular communication with all of our investors and actively consider their views on the company’s strategy and progress. Our Board of Directors and management team are committed to driving long-term value for our shareholders, employees, and customers and are focused on taking actions that enable us to deliver on this objective.”
Ancora believes that Forward Air’s (FWRD) shares could trade north of $100 over the next six months if shareholders vote down the Omni deal and also vote to replace the board and management at a special meeting. Over the immediate term, under a revamped board, FWRD’s share could trade to $140-$145, according to Ancora.
