Old Dominion Freight Line, which has less than a truckload, has entered into a $1.5 billion bid for Yellow Corp.’s terminals. The new show Bid price exceeds $1.3 billion from LTL peer Estes Express Lines, which was revealed in Thursday’s status update.
The 166-station portfolio offering is a stalking horse purchase agreement, in which the bidder sets a minimum value of the assets to be sold from the bankruptcy estate. The properties will still be subject to a marketing and sales process in which higher bids from third parties can be accepted.
The terms provide for a maximum breakup fee of $26 million and up to $2 million in reimbursement of expenses. Old Dominion (NASDAQ: ODFL) requires a 5% deposit. The bid will remain valid for 180 days.
Thursday’s court action also identified the bankruptcy financing lenders.
Hedge funds Citadel and MFN Partners will provide $142.5 million in debt in possession (DIP) financing, which will give Yellow’s estate the funds to liquidate the assets. The transaction also includes an additional deferred drawing commitment from MFN of up to $70 million.
MFN acquired 42.5% of the shares in Yellow prior to its offering close.
castle recently Buy a Yellow loan for a term from Apollo Global Management (NYSE: APO) after submitting superior DIP financing offers following Yellow’s Aug. 7 filing for bankruptcy. The Apollo DIP deal was said to be the only viable offer made to Yellow prior to the Chapter 11 petition.
A representative from Old Dominion could not immediately be reached for comment.
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