But USA Truck has not been interested in a deal, Knight said Thursday. Knight said it may consider "modestly" raising its bid if it finds more value in USA Truck during a due diligence process. USA Truck declined to comment Thursday to The Associated Press.
The deal on offer, which values USA Truck at $95 million for its equity, or $242 million with debt included, is being portrayed by Knight as paying a 39% premium to yesterday's closing price of its rival's shares. Investors today have bid up USA Truck's shares to just under $9 at this writing, suggesting high confidence among investors that the deal will go through.
Knight already owns 8% of USA Truck's shares, and believes that its $9-a-share offer for the rest "would provide significant and immediate cash value that is significantly more attractive than USA Truck's stand-alone prospects." Prior to the offer being made, USA Truck had a market capitalization of only $67 million -- against $148 million in debt, and less than $1 million in cash on hand.
As for what's in it for Knight, the company said "a combination with USA Truck would create value by further enhancing our position as a leading provider of multiple truckload transportation services in North America," increasing its annual revenues by about $531 million, or 55%, in one fell swoop.
USA Truck is in the midst of a turnaround effort. It hasn't reported an annual profit since 2008.
-- Material from The Associated Press was used in this report.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.