EGL investor Federated Kaufmann challenges CEO Crane's buyout offer

By Lisa Kerner

Charlotte, N.C., April 2 - EGL, Inc. investor Federated Kaufmann Small Cap Fund filed a lawsuit challenging the proposed buyout of EGL led by company chairman and chief executive officer James R. Crane.

Federated Kaufmann Small Cap Fund is a New York-based mutual fund that owns 900,000 shares of EGL common stock, according to a company news release.

In its March 27 complaint filed in the District Court of Harris County, Texas, Federated Kaufmann claims that Crane's $38.00 per share buyout price is "grossly inadequate." The suit also contends that EGL's board of directors rushed to approve the offer knowing that private equity firm Apollo Management LP was about to make a higher offer. Apollo offered $40.00 per share for the company.

Federated Kaufmann believes the board violated its fiduciary duties by cutting the bidding process short and that the board was wrong to approve a $30 million windfall termination fee payable to Crane in the event that Apollo were to acquire EGL.

On March 1, Crane, senior EGL management and investment firms Centerbridge Partners, LP and the Woodbridge Co. Ltd. proposed acquiring all of the outstanding common stock in a $1.7 billion transaction slated to close in the second or third quarter of 2007.

Houston-based EGL is a global transportation, supply chain management and information services company.

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