Yellow Roadway (YELL), which has had an incredible run during this economic recovery, re-affirmed their belief in the merger with USF this morning despite the fact that USF pre-announced a dissapointing quarter.
However, the market is now going to re-affirm it’s belief that YELL bought at the top, oil is having a serious impact on the economy, and the Transportation stocks have formed an intermediate term top. Several weaker transportation stocks such as Eagle (EAGL) have already formed a top and declined significantly and I think the higher quality companies will now move lower. Unfortunately, the weakness in the transportation stocks indicates that the market is pricing in a slowdown in the economy.
Yellow Roadway Reaffirms Confidence in Value of USF Acquisition
Friday April 8, 9:00 am ET
OVERLAND PARK, Kan., April 8 /PRNewswire-FirstCall/ — Yellow Roadway Corporation (Nasdaq: YELL – News) remains confident that the acquisition of USF Corporation (Nasdaq: USFC – News) will provide significant value for shareholders of both companies.
"The first quarter results at USF do not change our assessment of the value of this strategic acquisition," stated Bill Zollars, Chairman, President and CEO of Yellow Roadway. "Given their first quarter revenue growth and tonnage increase, we believe the business fundamentals remain sound. Once we have the opportunity to leverage the combined expertise of Yellow Roadway and USF, and pursue synergy opportunities of $150 million, we are confident that additional value will be created."
