ArcBest seeks to lower shareholder vote number to approve a merger or sale

A proposed change in the number of ArcBest shareholder votes required to approve a sale or merger is giving life to previous conjecture that the Fort Smith-based shipping and logistics company could be acquired by Montreal-based TFI International.

In a filing earlier this week with the U.S. Securities and Exchange Commission, the board of directors of Fort Smith-based ArcBest offered an amendment to company bylaws that would end the 66.66% “supermajority” vote of shareholders to approve a company sale or merger and institute a simple majority vote if the publicly held company were to be subject to acquisition. The amendment must be approved by shareholders.

Autumnn Mahar, ArcBest’s director of external communications and public relations, said the proposed amendment is simply one of several “governance changes” the board sought to make after reviewing its bylaws.

“This change as well as several other governance changes were made as part of a broader governance review we conducted that aligns with shareholder feedback, evolving corporate governance practices and the governance structure of the majority of S&P 500 companies,” Mahar noted in a statement.

In its Proxy filing encouraging shareholders to vote for the amendment, ArcBest noted that “elimination of the Supermajority Voting Requirements increases the Board’s accountability to stockholders and provides stockholders greater ability to participate in the corporate governance of the Company, …”

The company declined to comment when asked if ArcBest was in negotiations to be acquired or had hired a consultant or legal counsel to prepare for a possible acquisition.

In the fourth quarter of 2022, TFI International spent around $89 million for more than 1 million ArcBest shares. The move sparked rumors among investment analysts that TFI, a logistics and shipping company active in acquiring other businesses to expand its footprint in North America, was pursuing an ArcBest deal. For the year ended Dec. 31, 2023, TFI acquisitions totaled $628.7 million to acquire 12 businesses.

Satish Jindel, an LTL consultant, told Trucking Dive in this report that he doesn’t think TFI is trying to buy ArcBest.

“[TFI] didn’t cross the 5% threshold that required them to file. So they did it to just get some rumors started. They have accomplished that,” Jindel said.

FreightWaves reported in early 2023 that Alain Bédard, TFI’s chairman, president and CEO, had said that because TFI and ArcBest’s drivers are unionized, “there are some things that we could work together [on] and improve over time.” Also in the FreightWaves report, Jason Seidl, a transport analyst for Cowen & Co., said TFI is likely interested in acquiring ArcBest.

In an updated story posted in March by Trucking Dive, Jindel said lowering the vote threshold “makes it easier for Alain Bédard to pursue his interest in the company.”

ArcBest has around 15,000 employees at 250 locations. ABF Freight is the largest subsidiary is a less-than-truckload carrier. On Feb. 6, the company reported a full-year net income of $195.433 million, down 34.4% compared with $298.209 million in 2022. Revenue in 2023 totaled $4.427 billion, down 12% compared with $5.029 billion in 2022.

TFI has around 25,100 employees and more than 590 facilities. In 2023, the company reported a net income of $538.333 million, down from $731.668 million in 2022. TFI revenue in 2023 was $7.521 billion, down from $8.812 billion in 2022.