UPS Agrees To Purchase Overnite

[wkmac]

According to the reports UPS to pay $1.25 bil in cash so what happened to the idea of using out stock as a currency? I'm glad to see UPS do this not specifically buying Overnite as I have no idea at this point just how well it will fit in but just buying within this market segment. Many like myself would only ask, "what took em' so long?"

 

[mannbrn]

Didnt Overnite workers end a three year strike after they were told by the teamsters to return to work without a new contract and no agreement reached?

 

[wkmac]

Maybe Hoffa was behind this so he could get more ft jobs to invest in the struggling IBT pension plans and maybe Eskew guaranteed him a contract?

Seriously, that is a good point and my wife was asking me, "isn't Overnite union" and I couldn't remember and had forgotten all about the strike. Will UPS keep this segment seperate from the union or will it allow the union to come in. If I understand the law the various Overnite sites will still have to hold elections to see if they want to be covered by collective bargaining so being union is not a given. My advice to the Overnite guys is not get in unless they are guaranteed to not be placed in the current troubled pension plans.

OH MAN, this could be real interesting if AWPA can get certified as a bargaining agent and compete directly against IBT to organize this segment. This could prove very intereesting indeed if this does happen and a positive for UPSers as they get to watch from the sidelines and compare the 2 side by side.

 

[robonono]

WOW, unbelievable. the rumor mill had this one right. they just missed the mark by 5 years. Better late than never.

Could be an interresting fit.

WKMAC, you're right - this could be interesting if AWPA makes their move now.

 

[wkmac]

Well they got one rumor right and another one still on the table. The best rumor I ever saw was the one that UPS would buy Microsoft. I'm serious that someone bounced that one back during the early Motley Fool days and I'm still holding Microsoft waiting for that to happen!

 

[robonono]

It's early, but so far the "market" seems to appreciate UPS's purchase of Overnight.


UPS up $.79 at 9:52 EDT

 

[wkmac]

robo,
Early this morning UPS was down and Overnite was up over 40%. Normally in transactions like this the one buying goes down and the one being bought goes up so if UPS does end the day up and Overnite also stays up it would suggest someone likes it. Regardless, UPS is buying marketshare and I won't question the good or bad of that but I am glad to see them finally do something on the freight side but how all this will be intregrated under one brand or left outside is still not clear, at least to me it is. With Menlo and now this does seem to be a one,two punch and this is good at least from surface appearances.

BTW: Another rumor for the last several years was UPS buying Yellow and more than one Yellow driver has asked about when they would browndown so it was on the other side of the fence as well. Hey, we still got some stock so let's go out and buy Yellow too! LOL!

Now that would rattle FedEx's cage IMO.

 

[moreluck]

We do the deed and Fedex is higher than UPS today. Sometimes I just don't get it

 

[upsdawg]

The purchase of Overnite is an interesting one--yes the rumor has been in place for 5 years that UPS was going to buy....Consolidated---than Yellow...and finally Overnite. I am thinking that someone else is in the market to buy---someone with extremely deep pockets--as in DHL---so it forced UPS hand to do something!!So here is where it gets interesting----if UPS acquired Yellow and they are union---it is pretty easy to merge 2 union companies. So did UPS acquire Overnite because it was the best value---or was it to force a company like DHL to try to merge a union company with a non- union company(DHL-Airborne).

 

[upsdude]

"UPS to pay $1.25 bil in cash"

Now that, is some serious "walking around" money!

 

[gman]

Yea, only leaves them something like 32 billion. in cash and equity.

 

[ok2bclever]

Only about 14% of the Overnite employees were Teamster and in only 22 of the 166 locations nationwide.

 

[ups79]

Many shareholders wonder, how did they arrive at the 1.25bl fiqure? I thought what fedex paid for kinkos was a joke, now our bod seem just as crazy. How many years do they fiqure it would take for this deal to show up as a positive to the bottom line. Who knows maybe they were buying "good will".

 

[upsdawg]

I think that it was a timing thing------there needs to be something to compliment Menlo----heavy air freight and we have customers that wil not split up their heavy air/ground volume--and the fact if we did not--is it possible that we had to play "Defense" and stop someone else from acquiring them?

The next question is---what was/is the value of Overnite and it's subsidiaries? We see a ton of Motor Cargo trucks on the west coast and in Nevada----did we pay $100 or $100 million too much??

Coming from a Sales background--I have been told by customers that we couldn't have their air unless we could take >130'/150 lb also---and with CWT---they would not separate their smaller shipments from larger ones----wish I was back in Sales---because at this point we have a huge portfolio of products available for our customers.UPS is the only carrier who can handle:

Small Package Ground/ Air----Air freight--LTL/FTL--Int'l Small Package--large package--air /ocean---Logistics----Capital backing---Int'COD Enhancement/Automatic-----did I miss something??

 

[otcer]

According to Overniters - UPS was to purchase them and came up a dollar short (meaning a $1 per share) - when Union Pacific bought them. As soon as UP spun them off - UPS was back at the door.

Price is seen as reasonable I think OTC had reported 2004 sales of 1.63 bln so with sales fluctuation - 1.25 bln guaranteed is fair.

 

[isdrone]

Think about it. Menlo / new freight hubs? Why not move it ourselves? Another domino has fallen into place. I wonder about the price though seems steep. Also remember Union Pacific owned Overnite and really messed it up. Overnite has an extensive network and they make money (not much, but we can work on those margins). Also remember Menlo (the portion we bought) was losing money when we acquired them. The parent company was more than happy to be rid of them.
What's next?

Acquisition rumors: In one of my classes several years ago the professor informed us that GE looked very hard at UPS while we were still private. Think how things would have been under Welch & Company.

 

[rushfan]

I spoke with a Motor Cargo employee. He seemed a bit worried about UPS buying Overnite. I thought you fool if I was in your shoes, I would be glad. Maybe he was upset he would have to actually earn his money.

I pick up from a GE electrical supplier. They didn't like Welch. Thank goodness he didn't want us.

As far as the stock price goes, we still aren't the darlings of wall street. Who gives a s#$% what they think about us.

 

[ironylife]

Is it just me or does overnight have the most jacked up trucks and trailers in the business. They are jalopies....hopefully they will now be able to upgrade their equipment. This will be good for us because we will be taking some of fedex freight volume....just because were ups. Last, I really dont think we will buy yellow, it would be too much money for ups tightwads!

 

[speeddemon]

rush, Im with ya on that!

 

[wkmac]

You know I like some of the ideas being thrown around but it's still unclear just how and if Overnite will be intergrated under the UPS brand name or will it remain a seperate piece of the puzzle. The potential it presents in a number of areas is good but the question I have will this addition be allowed to achieve this potential or is this just all talk from Glenlake? No one has the answer but let's just hope Glenlake has woke up, got off the mat and decided to start throwing some punches back at FedEx and DHL specifically!