Better than a soap opera: Atlantic Coast sues Mesa Air


Apparently a "terse" writer
Staff member
Atlantic Coast sues Mesa Air over statements
Tuesday October 28, 12:30 pm ET

NEW YORK, Oct 28 (Reuters) - Atlantic Coast Airlines (NasdaqNM:ACAI - News) on Tuesday said it has sued Mesa Air Group (NasdaqNM:MESA - News) , accusing it of making false statements in connection with its unsolicited approach to buy Atlantic.

Earlier this month, Mesa made an all-share bid for Atlantic, which had already announced its own plans to launch a low-cost airline. Atlantic said it wanted Mesa to correct "material misstatements." Atlantic also accused Mesa executives of engaging in insider trading.

According to court documents filed in the U.S. District Court for the District of Columbia, Atlantic accused Mesa of not coming clean about its financial situation. particularly on its difficulty in financing aircraft purchases.

Atlantic also criticized Mesa for not revealing it was being supported by UAL Corp.'s (OTC BB:UALAQ.OB - News) United Airlines in its bid for Atlantic. Atlantic has been United's partner, operating as the latter's feeder airline, but the two parties' relationship recently became strained, leading Atlantic to announce plans to start an independent airline.

Atlantic also accused Mesa executives of committing insider trading, saying in court papers that Mesa had failed to disclose that Mesa Chief Executive Jonathan Ornstein and other "Mesa insiders" sold "a substantial volume of Mesa shares in September 2003, shortly before Mesa announced its takeover attempt of Atlantic Coast."

Mesa's shares had rise to $13 levels in September before dipping to around $10. On Tuesday in early afternoon the shares were up 40 cents at $10.80 on Nasdaq.

A takeover of Atlantic would help both Mesa and United, as all three serve the U.S. East Coast.

Several analysts have questioned Atlantic's plans to launch a new airline and ignore Mesa's approach.

"(ACA's) going forward plan to be an independent airline makes zero sense," aviation industry consultant Michael Boyd said.

"Unless someone comes in and takes them over, or they make a deal with United, I would be very concerned about the future of ACA," Boyd said. "Mesa may be their only hope. Going forward as an independent carrier ... is going to be a disaster for them."

(Additional reporting by David Bailey in Chicago)
Even More...

United Statement on Atlantic Coast Airlines Announcement Of Suit Against Mesa Air Group
Tuesday October 28, 12:03 pm ET

CHICAGO, Oct. 28 /PRNewswire-FirstCall/ -- United Airlines' (OTC Bulletin Board: UALAQ - News) senior-most executives negotiated extensively and in good faith with Atlantic Coast Airlines (ACA) to try to reach a competitive United Express agreement similar to those we reached with other carriers. We presented multiple enhanced offers to ACA and remained in discussions until October 16, a day prior to ACA's board meeting. However, ACA's management made clear that ACA -- not United -- would not negotiate further.
United Airlines reaffirms categorically that it did not participate in Mesa Air Group's offer to acquire ACA, and to suggest otherwise is baseless and irresponsible. In fact, United expressly declined Mesa's invitation to participate in its offer.

Because ACA insists on pursuing its new strategy, it is only prudent now for United to examine all of its alternatives, including beginning discussions with Mesa regarding United Express service in the event Mesa acquires ACA.
Why do the analyist think ACA won't make it? It seems that they have a very committed group there and they have a few things going in their favor from what I have read.
Someone should sell tickets .... I'd buy!

Well at least ACA isn't rolling over. You can argue the wisdom of an independet carrier till the cows come home (has any one ever actually seen "cows come home?") but it takes guts to turn around and sue the company that's trying to end run your board via a hostile takeover. Good for ACA!
Why do the analyist thing ACA won't make it?

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Not to fret, analysts normally don't know what the heck they're talking about.

About 50% of airline analysts preach about the virtues of non-union SWA...
Because "analyists" are MBA guys who couldn't find work outside of sitting in an office and arbitrarily tossing their "opinions" out on various subjects - completely ignoring/downplaying the fact they usually have zero experience in what ever field they "analyze."

Case in point - why run a business of your own when you can sell out to the first fool who offers 50 cents per share more than your current stock value, make the shareholders some money, make the CEO some money and crap all over all the employees to boot?
50% of airline analysts preach about the virtues of non-union SWA...

[/ QUOTE ]

Ahhh.. i get it! HAHA

About 50% of airline analysts preach about the virtues of non-union SWA...

[/ QUOTE ]

The other 50% complain about the labor costs of heavily unionized DAL.
As the Cajun Cook says \"...A liddle MO\"

Mesa Denies UAL Is Behind Bid For Atlantic Coast
Tuesday October 28, 1:54 pm ET
By Elizabeth Souder, Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Mesa Air Group Inc. said UAL Corp. , the parent of United Airlines, isn't behind Mesa's proposal to buy regional carrier Atlantic Coast Airlines Holdings Inc. (NasdaqNM:ACAI - News) , and that Atlantic Coast is grasping at straws by going to court.

Early Tuesday, Atlantic Coast filed a complaint in federal court accusing Mesa of making false and misleading statements as Mesa proposed to buy Atlantic Coast in a stock swap. Atlantic Coast has urged its shareholders to ignore the buyout proposal.

Atlantic Coast accused Mesa of not disclosing that UAL is behind the offer. Atlantic Coast didn't specify UAL's possible role.

Both Mesa and Atlantic Coast unit Atlantic Coast Airlines currently operate regional flights for United. Atlantic Coast wants to terminate its contract with United so that the regional airline, based in Dulles, Va., can become an independent, low-cost carrier.

"It would appear the suit is not unexpected. It would appear that Atlantic Coast is doing all it can to prevent shareholders from choosing the course of the company," the Mesa spokesman said.

Mesa officials have said they want to buy Atlantic Coast and continue operating it as a regional carrier, and they will try to negotiate a contract with United. Mesa officials have also said the purchase will improve Mesa's ability to finance new planes.

A spokesman for Mesa, who declined to be identified by name, said the regional airline didn't negotiate with UAL about the bid for Atlantic Coast. He said Mesa only informed UAL of the proposal before publicizing it. Mesa has talked to United Airlines about contracting with Atlantic Coast should Mesa and Atlantic Coast merge.

In its own statement, United Airlines denied any involvement in the Mesa offer.