Ancora Issues Letter to Forward Air Corporation’s Board of Directors Regarding the Need to Initiate a Strategic Review Based on Acquirer Interest
Ancora Holdings Group, a top 10 shareholder of Forward Air (NASDAQ: FWRD), has issued an open letter to the company's Board of Directors urging them to initiate a strategic review for a potential sale. The letter highlights Forward Air's poor performance, with negative Total Shareholder Return across 1-, 3-, 5- and 10-year periods, significantly underperforming market indices. Ancora criticizes the company's recent acquisition of Omni Logistics, which has increased debt and destroyed shareholder value. The investor group believes that a sale to a private buyer would be the best option to address Forward Air's balance sheet issues, improve operations, and deliver value to shareholders. Ancora suggests that approximately 22% of shareholders support a strategic review and warns of a potential campaign to replace Board members at the 2025 Annual Meeting if shareholder interests are ignored.
Ancora Holdings Group, uno dei principali dieci azionisti di Forward Air (NASDAQ: FWRD), ha inviato una lettera aperta al Consiglio di Amministrazione dell'azienda esortandoli a avviare una revisione strategica per una potenziale vendita. La lettera mette in evidenza la scarsa performance di Forward Air, con un ritorno totale negativo per gli azionisti su periodi di 1, 3, 5 e 10 anni, che ha sotto-performato in modo significativo rispetto agli indici di mercato. Ancora critica l'acquisizione recente della Omni Logistics, che ha aumentato il debito e distrutto valore per gli azionisti. Il gruppo di investitori crede che una vendita a un acquirente privato sarebbe la migliore opzione per affrontare i problemi di bilancio di Forward Air, migliorare le operazioni e fornire valore agli azionisti. Ancora suggerisce che circa il 22% degli azionisti sostiene una revisione strategica e avverte di una possibile campagna per sostituire i membri del Consiglio nella Riunione Annuale del 2025 se gli interessi degli azionisti verranno ignorati.
Ancora Holdings Group, uno de los diez principales accionistas de Forward Air (NASDAQ: FWRD), ha enviado una carta abierta a la Junta Directiva de la empresa instándoles a iniciar una revisión estratégica para una posible venta. La carta destaca el bajo rendimiento de Forward Air, con rendimientos totales negativos para los accionistas en períodos de 1, 3, 5 y 10 años, subrendiendo significativamente a los índices del mercado. Ancora critica la reciente adquisición de Omni Logistics por parte de la compañía, que ha aumentado la deuda y destruido el valor para los accionistas. El grupo de inversores cree que una venta a un comprador privado sería la mejor opción para abordar los problemas del balance de Forward Air, mejorar las operaciones y brindar valor a los accionistas. Ancora sugiere que aproximadamente el 22% de los accionistas apoya una revisión estratégica y advierte sobre una posible campaña para reemplazar a los miembros de la Junta en la Reunión Anual de 2025 si se ignoran los intereses de los accionistas.
Ancora Holdings Group는 Forward Air (NASDAQ: FWRD)의 10대 주주 중 하나로, 회사의 이사회에 공개 서한을 발송하여 잠재적 매각을 위한 전략 검토를 시작할 것을 촉구했습니다. 이 서한은 Forward Air의 부진한 실적을 강조하며, 1년, 3년, 5년 및 10년 동안의 총 주주 수익률이 부정적으로 나타나며 시장 지수에 비해 현저하게 부진하다는 점을 지적합니다. Ancora는 회사의 최근 Omni Logistics 인수에 대해 비판하며, 부채를 증가시키고 주주 가치를 파괴했다고 언급했습니다. 투자자 그룹은 개인 구매자에게 매각하는 것이 Forward Air의 재무 문제를 해결하고 운영을 개선하며 주주에게 가치를 제공하는 최선의 선택이 될 것이라고 믿고 있습니다. Ancora는 약 22%의 주주가 전략 검토를 지지한다고 제안하며, 주주 이익이 무시될 경우 2025년 연례 회의에서 이사회를 교체할 수 있는 잠재적인 캠페인에 대해 경고합니다.
Ancora Holdings Group, l'un des dix principaux actionnaires de Forward Air (NASDAQ: FWRD), a adressé une lettre ouverte au conseil d'administration de l'entreprise les exhortant à lancer une révision stratégique pour une vente potentielle. La lettre met en avant la mauvaise performance de Forward Air, avec un rendement total des actionnaires négatif sur des périodes de 1, 3, 5 et 10 ans, sous-performant considérablement les indices du marché. Ancora critique l'acquisition récente d'Omni Logistics par l'entreprise, qui a augmenté la dette et détruit la valeur pour les actionnaires. Le groupe d'investisseurs estime qu'une vente à un acheteur privé serait la meilleure option pour traiter les problèmes de bilan de Forward Air, améliorer les opérations et offrir de la valeur aux actionnaires. Ancora suggère qu'environ 22 % des actionnaires soutiennent une révision stratégique et met en garde contre une campagne potentielle pour remplacer les membres du conseil lors de l'Assemblée générale de 2025 si les intérêts des actionnaires sont ignorés.
Ancora Holdings Group, einer der zehn größten Aktionäre von Forward Air (NASDAQ: FWRD), hat einen offenen Brief an den Vorstand des Unternehmens geschickt, in dem sie ihn auffordern, eine strategische Überprüfung für einen möglichen Verkauf einzuleiten. Der Brief hebt die schlechte Performance von Forward Air hervor, mit negativem Gesamtrendite für die Aktionäre über 1-, 3-, 5- und 10-Jahreszeiträume, die deutlich unter den Marktindizes liegt. Ancora kritisiert die jüngste Akquisition von Omni Logistics, die die Schulden erhöht und den Aktionärswert zerstört hat. Die Investorengruppe ist der Meinung, dass ein Verkauf an einen privaten Käufer die beste Option wäre, um die Bilanzprobleme von Forward Air anzugehen, die Abläufe zu verbessern und den Aktionären Wert zu liefern. Ancora schlägt vor, dass etwa 22% der Aktionäre eine strategische Überprüfung unterstützen, und warnt vor einer möglichen Kampagne zur Ablösung von Vorstandsmitgliedern auf der Jahreshauptversammlung 2025, falls die Interessen der Aktionäre ignoriert werden.
- Potential for a sale of the company at a premium to current share price
- 22% of shareholders reportedly support a strategic review
- Possibility of addressing balance sheet issues and improving operations through privatization
- Negative Total Shareholder Return across 1-, 3-, 5- and 10-year periods
- Significant underperformance compared to market indices
- Value destruction from debt-funded acquisition of Omni Logistics
- Highly levered balance sheet requiring urgent attention
- Risk of a proxy fight at the 2025 Annual Meeting if shareholder interests are ignored
Insights
Ancora's letter to Forward Air's Board is a significant development that could reshape the company's future. The shareholder's call for a strategic review, backed by a
The recent Omni Logistics acquisition, criticized as "value-destructive," has left Forward Air with a highly leveraged balance sheet. This financial strain, coupled with a soft freight market, puts immense pressure on the new management. A potential sale could offer shareholders a premium and mitigate further risks, making it a compelling option for the Board to consider seriously.
This situation underscores critical corporate governance issues at Forward Air. The Board's decision-making, particularly regarding the Omni acquisition, is under intense scrutiny. With shareholders holding approximately
The threat of a proxy contest at the 2025 Annual Meeting adds urgency to the situation. The Board must carefully weigh its fiduciary duties against potential personal interests in maintaining control. Engaging independent advisors for a strategic review would demonstrate good faith and could help mitigate reputational risks for Board members, regardless of the outcome.
Ancora's push for a sale process opens up intriguing M&A possibilities for Forward Air. The logistics sector has seen significant private equity interest and Forward Air's struggles could make it an attractive turnaround opportunity. The company's current market position, despite recent challenges, could command a meaningful premium in a sale scenario.
However, the Board must navigate carefully. While a sale might offer immediate shareholder value, it's important to ensure a fair and competitive process. The mention of "well-capitalized buyers" suggests potential for a bidding war, which could drive up the acquisition price. The Board should consider engaging multiple bidders to maximize value, while also evaluating standalone turnaround options to strengthen its negotiating position.
Believes the Board Must Engage with Prospective Buyers Following a “Lost Decade” Defined by Overwhelmingly Negative TSR and Significant Underperformance Across 1-, 3-, 5- and 10-Year Periods
Contends the Private Market is the Best Place for Forward Air to Fix Balance Sheet Issues, Improve Operations, and Serve Customers and Other Stakeholders
Expects a Sale to Deliver Meaningful Premiums Relative to the Company’s Current and Unaffected Share Prices, While Eliminating Further Risk for Long-Suffering Shareholders
***
August 20, 2024
Forward Air Corporation
1915 Snapps Ferry Road, Building N
Attn: The Board of Directors
Members of the Board,
Ancora is a top 10 shareholder of Forward Air, with an approximately
Forward Air now stands at a crossroads. If the Company remains in the public market, it will need to flawlessly execute to achieve deal-related synergies, cut excess costs, fix its highly levered balance sheet and grow in a profitable manner. New management, which is shackled to many of prior management’s questionable decisions, will have limited margin for error as it tries to pull off a multi-faceted turnaround amidst a soft freight market and with the overhang of a recession. Considering Forward Air’s decade of struggles, as evidenced by the following Total Shareholder Return figures, we believe the Board must evaluate any and all alternatives that exist today:1
Since Omni Deal Announcement |
1-Year |
3-Year |
5-Year |
10-Year |
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Forward Air |
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S&P 500 Index |
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Russell 2000 Index |
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- |
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S&P 500 Air Freight & Logistics Index |
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We suspect that you have known for some time about parties being interested in buying Forward Air. Now that a private equity firm in the shareholder base has taken the rare step of filing a Schedule 13D that discloses its desire to engage with the Board about strategic alternatives, the impetus is on you to announce a real review of sale options and the retention of truly independent legal and financial advisors. To be clear, it would undermine the credibility of any process to use the same professionals who profited from and supported the value-destructive acquisition of Omni. Conversely, running a robust process will likely spur productive near-term discussions with interested parties, including the many financial sponsors with holdings and expertise in the sector.
Holders of approximately
In closing, we are highly confident that the Board will be applauded for announcing a strategic review process that seeks to maximize value for shareholders. Our analysis suggests that a sale to one of the many well-capitalized buyers likely to engage in a process would deliver a meaningful premium relative to where Forward Air’s shares have traded before and after sale-related speculation started in late May. To the extent it is helpful, we are willing to meet at your convenience to provide perspectives and recommendations for delivering the right outcome for Forward Air shareholders.
Thank you in advance for your prompt attention to this letter. While a sale may not be your first choice, prioritizing shareholders’ interests and protecting them from more permanent value destruction must be your top priority.
Sincerely,
Frederick D. DiSanto Chairman and Chief Executive Officer Ancora Holdings Group, LLC |
James Chadwick President Ancora Alternatives LLC |
***
About Ancora
Founded in 2003, Ancora Holdings Group, LLC offers integrated investment advisory, wealth management, retirement plan services and insurance solutions to individuals and institutions across
1 Total Shareholder Return data, inclusive of dividends reinvested, are sourced from Bloomberg LP and run through May 27, 2024, which is the last trading day before public reports that Irenic Capital Management LP, a top 10 shareholder, was calling for a review of strategic alternatives.
2 Approximation accounts for publicly disclosed holdings of three separate investors: Ancora Holdings Group, LLC, Clearlake Capital Group, LP and Irenic Capital Management LP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240820689918/en/
Longacre Square Partners
Charlotte Kiaie / Bela Kirpalani, 646-386-0091
ancora@longacresquare.com
Source: Ancora Holdings Group, LLC
FAQ
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