USF, Transport Corp. Cancel Merger

February 9, 2000 2:25 PM, EST

USFreightways Corp. and Transport Corp. of America have called off a plan to merge the companies.

Illinois-based USFreightways offered to buy truckload carrier TCA for about $150 million in stock. However, the price of USFreightways stock has fallen by about $4 a share since the deal was announced on Jan. 12, reducing the value of the transaction by about 12%.

TCA of Eagan, Minn., reported a net loss of $406,000 in the fourth quarter of 1999, when the company took a special charge related to bad debt reserves and costs associated with the acquisition of tractors and trailers in anticipation a large dedicated contract. A decision on the contract has been delayed until the first quarter of 2000.

Higher fuel costs also affected earnings in the fourth quarter, TCA officials said.

TCA President Robert J. Meyers said the company continues to engage Deutsche Banc Alex. Brown to pursue opportunities to enhance shareholder value.