Shares in Richmond, Virginia-based Overnite Corp. rose as much as 18 percent in the first day of trading on Friday after Union Pacific Corp. sold stock in its trucking business. Shares of Overnite closed up $3.16 to $22.16 on Nasdaq after earlier touching $22.33. Union Pacific said the sale of almost all of Overnite will add about $200 million, or 75 cents a share, to fourth-quarter earnings.
The sale is the first initial public offering of a trucking company in six years.
Overnite is one of the biggest less-than-truckload carriers in the United States, with 208 service centers, about 6,000 tractors and more than 22,000 trailers. It is mostly nonunion and operates under two names: Overnite Transportation and Motor Cargo Industries.
Union Pacific, which bought Overnite in 1986 for $1.2 billion, said it was selling after expected "synergies" between the railroad and trucking units didn’t occur.
According to filings at the Securities and Exchange Commission, Union Pacific expects total proceeds of $522.5 million from the sale of 25 million shares at $19 each and 2.5 million additional shares if there is more demand. UP officials said they will use the proceeds to redeem $500 million, or one-third, of its convertible notes sold in 1998.
