NEW YORK, March 21 /PRNewswire/ -- Admiral Advisors, LLC, an affiliate of Ramius Capital Group, L.L.C., today sent the following letter to the Board of Directors of EGL, Inc. :
March 21, 2007
Board of Directors
EGL, Inc.
15350 Vickery Drive
Houston, TX 77032
Ladies and Gentlemen:
As you may know, certain entities affiliated with Admiral Advisors, LLC, an affiliate of Ramius Capital Group, L.L.C. (together, "Ramius" or "we") are substantial shareholders of EGL, Inc. ("EGL" or the "Company"). As of March 21, 2007, Ramius owns approximately 1,180,000 shares of EGL, which represents approximately 2.9% of the outstanding shares. We are writing regarding the Company's announced sale for $38 per share to a group of investors led by EGL's Chairman of the Board and Chief Executive Officer, James R. Crane, and various subsequent disclosures regarding the interest of Apollo Management in acquiring EGL at a higher price.
Although we are encouraged that the Special Committee has arranged for Apollo to finally conduct its due diligence investigation with respect to its $40 per share proposal, we have significant reservations about the events which appear to have transpired in connection with the Company's purported sale process. While we recognize that this is a complex situation, we were shocked to learn in a report by Reuters released just hours after EGL announced that it had accepted Mr. Crane's management-led buyout at $38 per share that Apollo had submitted a $40 per share offer. Our frustration was intensified by the fact that Apollo evidently was attempting to engage in a meaningful dialogue with EGL in the days and weeks leading up to the announcement of the management-led buyout.
Frankly, serious questions are raised if the Company did not engage in discussions with Apollo early on in the process in any effort by the Board to maximize the value of EGL, especially given the ownership by Apollo of CEVA Logistics. The need to involve Apollo as well as other third parties in this process is particularly crucial given the inherent conflict of interest created by Mr. Crane's 17.6% stake in EGL as well as his ability to influence and direct the management team of EGL. It is incredible that more than 11 weeks have passed since Mr. Crane proposed his first low-ball offer at $36 per share, yet Apollo has evidently conducted only minimal due diligence to date. If there is any truth to Apollo's assertion that its efforts to obtain information for diligence were ignored, this would seem to be a clear violation of the Board's fiduciary duties which the shareholders will not tolerate.
We would have much preferred to see a transparent, unfettered bidding process resulting in maximum value for shareholders with each participant being allowed to present its highest and best offer. Instead, it appears that the Board played favorites by accepting the $38 per share bid and even agreed to pay a breakup fee of approximately $0.75 per share to Mr. Crane and his group in the event that EGL accepts a superior offer.
Notwithstanding these concerns, EGL now is presented with an excellent opportunity to ensure that two high-quality, well-financed bidders are given the opportunity to fully and fairly value the Company. The members of the Board, as fiduciaries, must make the most of this enviable position and utilize it to the advantage of all shareholders. We implore the Board to refrain from taking any actions which would tax, create frictional costs or otherwise interfere with the ongoing bidding process. Simply put, under the current set of circumstances, the Board must take whatever actions are necessary to allow the two interested parties, or any other interested parties who might make an offer which could result in a Superior Proposal, to make their highest and best offer for EGL, without any interference or undue influence from the Board or management. We hope that the Board will carry out its fiduciary duties.
Sincerely,
Mark R. Mitchell
Partner
cc: Glenn Crafford, Deutsche Bank
Bob Jewell, Esq.
Steve Wolosky, Esq.
About Ramius Capital Group, L.L.C.
Ramius Capital Group is a registered investment advisor that manages assets of approximately $7.9 billion in a variety of alternative investment strategies. Ramius Capital Group is headquartered in New York with offices located in London, Tokyo, Hong Kong, Munich, and Vienna.
