Moyes Buys 8% Interest in Simon
"Management is pleased if Mr. Moyes thinks Simon is a good investment," said Simon Chief Financial Officer Alban Lang. "But this is a personal investment. It has nothing to do with Swift Transportation."
Well known in the truckload sector as a master of acquisitions, Moyes paid $1.1 million over the last two months for 233,550 shares of the refrigerated carrier's Class A stock. The stock was bought with funds from the private Jerry and Vickie Moyes Family Trust.
He acquired additional shares in Simon when Salt Lake City-based SME Steel Contractors-Utah, 75% of which Moyes owns, paid $1.3 million for 300,000 shares over the last month.
This gives Moyes control of 533,550 shares, or 9.9%, of Simon's Class A stock. Since company patriarch Richard D. Simon owns all 913,751 shares of the Class B stock, which gets two votes per share, he controls more than 25% of the voting power.
"[Moyes] has in the past had thoughts about buying the company, and I think he would be interested in purchasing a refrigerated carrier," said Arthur Hatfield, an analyst with Morgan Keegan & Co. in Memphis, Tenn. "If you look at Simon's assets and equipment, it's all in pretty good shape. The biggest problems are the management and the driver pool."
atfield said a creeping acquisition, in which stock is acquired little by little over time, is a possibility.
Simon has floundered operationally and financially the last 18 months, losing $2.7 million in the first three quarters of the current fiscal year, compared to a $16,500 profit over the first nine months of 1998.
Company officials have attributed Simon's woes to low freight rates and sinking revenue per mile.
In July, Simon laid off 140 people -- 25% of its work force -- in an effort to cut costs.
Simon's stock closed Aug. 27 at $5.50 -- the highest it's closed since June 15 -- on volume of 235,200 shares.
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