New bid for Canadian Freightways to face competing offer at auction

VANCOUVER, Wash. (Aug. 6, 2003) — Bankrupt carrier Consolidated Freightways Corp. said yesterday it has a $90 million offer for its Canadian Freightways unit, but will hold an auction in search of a higher bidder on Aug. 25.

The Vancouver, Wash.-based company, which filed for Chapter 11 bankruptcy protection in September 2002, said investors led by an unnamed Canadian capital management firm (“Proposed Purchaser”) signed an agreement to buy the independently-operated Canadian Freightways and affiliates (CFL) for about US$90 million, including the assumption of liabilities.

However, the bankruptcy court last week issued a bidding procedure order, meaning the Proposed Purchaser’s offer is expressly subject to higher and better bids from competing bidders later this month. The company is advising interested bidders to contact CF’s investment banker, Chanin Capital Partners, at 310/445-4010.

“It goes along with the process, which is that most of our assets have been sold at auctions,” CF spokesperson Mike Brown told Today’s Trucking. “Our equipment auctions have been completed. The auctions in North America for our 220 terminals are continuing. It’s all sold in the same way in which contracts are reached, which then become ‘stalking horse’ bids, and auctions are held.”

Brown also confirmed other parties have expressed interest and they could enter higher bids at auction time. “There’s been a lot of interest, a lot conversations, and discussions,” he said.

Brown said the “Proposed Purchaser” did not want to be identified at this point, and could not say whether the management firm is the same or part of a group led by the unit’s senior managers which proposed a $90 million bid to acquire Canadian Freightways this past April. The deal was halted when the two parties didn’t meet the April 1 deadline to enter a firm agreement.

Based in Calgary, Canadian Freightways — which is independently operated from CF and was not part of the bankruptcy proceedings last September — is known primarily as a less-than-truckload carrier, but also operates truckload and parcel units, sufferance warehouses, a customs brokerage, international freight forwarding, and logistics management businesses.