Activist investor urges Forward Air to pursue sale for better shareholder value

From Yahoo Finance: 2025-05-21 11:27:00

Ancora Holdings Group calls for the removal of three Forward Air directors responsible for the Omni Logistics acquisition, citing disastrous results and stalling of a sale process. Share price has plummeted from $110 to $18.04, triggering shareholder backlash and a looming board shake-up at the June 11 annual meeting.

Forward Air’s debt leverage ratio stands at 5.3 times at the end of the first quarter of 2025, higher than projected levels. Despite expectations of improved EBITDA post-merger, the company’s performance has fallen short, leading to credit agreement modifications to avoid breaching debt covenants.

Ancora accuses Forward Air’s board of delaying a strategic review despite pressure to explore selling the company. The board’s alleged entrenchment tactics include avoiding engagement with interested shareholders and opting into Tennessee M&A laws to prevent interactions for a five-year period.

Forward Air’s proposed reincorporation in Delaware to facilitate a potential sale is met with skepticism from Ancora, who views it as a reactionary move to paper over past actions. The board’s governance practices and decision-making processes are scrutinized, highlighting a lack of transparency and shareholder value maximization efforts. Forward Air’s proxy filing calls for a board reset to 11 members. Stewart, Forward’s CEO, joined a year ago after the company closed a deal with Ceva Logistics. The company’s liquidity position improved in Q1, with a focus on improving freight mix at its expedited LTL unit to win heavier shipments.

Ancora highlighted declining EBITDA and margins in Forward’s legacy expedited unit, with opportunities to sell directly to shippers and leverage terminals and warehouses. It estimates the company’s yields are 32% below market, impacting operating ratios. Ancora provided takeout scenarios with potential upside based on EBITDA multiples.

Ancora urges Forward Air to consider a sale for the best risk-adjusted outcome. The activist investor previously had success in improving the company’s operations and board composition. Forward Air’s spokesperson emphasized the board’s focus on maximizing shareholder value and leading a strategic review process.

Read more: Activist investor pushes Forward Air to execute ‘value-maximizing sale’