Con-way Inc (NYSE:CNW) is among the top gainers on Thursday, as the stock is currently trading at more than 33% up from its closing price on Wednesday. The logistics and supply-chain management service provider announced after the market close on Wednesday that it has agreed to be acquired by XPO Logistics Inc (NYSE:XPO) for a deal worth around $3 billion or $47.6 per share. The transaction also includes a net debt of $290 million. On the other hand, XPO Logistics Inc (NYSE:XPO) is among the biggest losers on Thursday as the stock has plunged 11% today following the acquisition announcement.
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This acquisition would elevate XPO Logistics Inc as the second largest less-than-truckload (LTL) provider in North America. This deal follows many other similar third-party logistics provider acquisition by XPO, which included companies like Coyote Logistics and Norbert Dentressangle. XPO intends to increase Con-way Inc (NYSE:CNW)’s operating profit by around $170 – $210 million in the next two years. All of Conway’s subsidiaries will be rebranded as XPO Logistics and XPO’s CEO Bradley Jacobs will continue to lead the combined company.
Year-to-date Con-way Inc (NYSE:CNW) stock has lost around 30% before the jump today. On the other hand, XPO Logistics Inc (NYSE:XPO) lost around 26% YTD, including the huge drop today. Let’s take a look at what hedge funds think about Con-way Inc (NYSE:CNW) and XPO Logistics Inc (NYSE:XPO) and whether they were expecting this acquisition.
Looking at hedge fund activity on Con-way Inc, there were capital inflows into the stock during the second quarter. By the end of June, there were 19 hedge funds with around $318.1 million investment in the stock. However, 21 hedge funds had 34% lower investment in the stock at the end of March. Considering the fact that the stock had dropped nearly 13% during the second quarter, we can rather say that hedge funds were bullish on the stock and expecting this kind of a deal to cash in. XPO Logistics Inc also received similar bullish bets from hedge funds as there was investment worth around $969.7 million by the end of June, compared to $689.9 million worth shares held by 34 hedge funds by the end of March, despite the fact that the stock value had remained almost neutral through the second quarter.
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Among the hedge funds that opened fresh position in Con-way Inc (NYSE:CNW) during the second quarter, Robert Bishop’s Impala Asset Management initiated the largest fresh position in the stock as the hedge funds bought around 1.6 million shares. Other hedge funds with similar optimism includes Clint Carlson‘s Carlson Capital and Kevin Michael Ulrich and Anthony Davis’ Anchorage Advisors. Edgar Wachenheim’s Greenhaven Associates increased the holding in the stock by a whopping 286% to 945,000 shares during the second quarter. There hedge funds were right in pouring money into the stock as they gained big today following the acquisition announcement.
Looking at XPO Logistics Inc (NYSE:XPO), top hedge funds like Ken Griffin‘s Citadel Investment Group and Israel Englander‘s Millennium Management opted to increase holding in the stock by 354% and 53% to 1.4 million and 1.5 million shares respectively during the second quarter. Jane Mendillo’s Harvard Management Co opened largest fresh position in the stock during the second trimester as the hedge funds purchased around 2.5 million shares during the same period.
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