Xtra, Celadon Cancel Mergers With Investors

Problems with financing forced the cancellation of two major transportation buyouts: Xtra Corp.’s purchase by Apollo Management; and Celadon Group’s acquisition by Odyssey Investment Partners.

tra, a major lessor of over-the-road trailers, marine containers and intermodal equipment, terminated its merger agreement with Apollo, a New York-based investment firm, and Interpool Inc., an ocean container leasing company, on Nov. 25.

Indianapolis-based Celadon, a truckload carrier that specializes in service to Mexico, ended its arrangement with Odyssey, a private investment fund in New York, on Nov. 30.

Under a $1.9 billion deal announced in June, Xtra shareholders were offered $65 a share in cash and the opportunity to retain a 10% interest in the Boston-based company. Apollo and Atlas Capital Partners, an affiliate of Interpool, would have owned the rest of the shares.

Chase Manhattan Bank and Credit Suisse First Boston had agreed to provide debt financing for the transaction. However, Xtra reported in late October that financing at the original terms might not be available because of market conditions (TT, 11-2-98, p. 4).

Apollo, Interpool and Xtra are discussing the possibility of an alternative transaction, company officials said.

Celadon also said it is reviewing strategic alternatives after its $20-a-share buyout by Odyssey was called off.

That transaction, worth about $154 million to Celadon stockholders, also had been announced in June.

Celadon said it had satisfied all of the conditions in the merger agreement, but the deal fell through because Odyssey’s source of interim financing, Bankers Trust Corp., did not fund its commitment.

Bankers Trust had said in September that a “material change” in the financial markets would prevent it from making a $125 million bridge loan in connection with the transaction (TT, 9-28-98, p. 51).

The funding decision was not based on any adverse change in the trucking company’s business, Celadon said.