The plot thickens.... Looks like Sir Richard Branson may be about to enter from stage left.
I've also heard rumors, as yet undocumented, that ACA has firm orders for 8 737-800s. I was told that this was in the Washington Post but havn't found it on their website. If true, the increase in debt would make ACA substantially less attractive for JO and Mesa.
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Atlantic Coast Shares Go Up as Sales Talk Goes On
Mesa Air Group Offered to Buy Regional Airline, and Virgin Atlantic May Also Be Interested
By Keith L. Alexander and Amy Joyce
Washington Post Staff Writers
Wednesday, October 8, 2003; Page E01
Shares of Dulles-based Atlantic Coast Airlines Holdings Inc. continued to climb yesterday as investors anticipated the airline would be sold, whether to Mesa Air Group Inc. or some other acquirer.
"The market thinks the company is in play and somebody else may come along and force Mesa to up its bid," said Benchmark Co. airline analyst Helane Becker.
On Monday, Phoenix-based Mesa offered $512 million in stock for Atlantic Coast, which dominates Terminal A at Dulles International Airport, in a deal that would create the nation's largest regional airline company. Based on Mesa and Atlantic Coast's closing stock prices Friday, the offer was about $11.30 a share, a 25 percent premium from Friday's price. Shares of Atlantic Coast climbed 83 cents yesterday to $11.88, up 7.5 percent. Shares of Mesa closed at $12.25, up 69 cents or nearly 6 percent.
Meanwhile, industry sources said billionaire Richard Branson, founder of London's Virgin Atlantic Airways, has shown interest in investing in Atlantic Coast and helping the airline maintain its independence.
Branson has long suggested that he wants to start a low-cost airline in the United States. This summer Atlantic Coast, which has 142 planes and serves 84 destinations, said it planned to sever its 14-year relationship as a United Airlines regional carrier and transform itself into an independent low-fare carrier by late spring.
Because of U.S. foreign ownership rules, Virgin would not be able to own more than 25 percent of the voting control of Atlantic Coast or 49 percent of its equity. A relationship between Atlantic Coast and Virgin would make the local airline the nation's only low-fare operation with an international tie.
A spokeswoman for Virgin Atlantic said the airline was not interested but declined to comment on whether Virgin USA, a U.S. unit created to explore the start-up of a low-cost carrier, might be.
In a conference call with airline analysts and investors, Mesa chief executive Jonathan G. Ornstein said that after several telephone conversations with Atlantic Coast shareholders, he is increasingly optimistic that they favor Mesa's bid.
Ornstein said that if Atlantic Coast's management decides to fight the bid, Mesa is prepared to take its proposal directly to shareholders for a vote. "It's the least attractive option, but it is one we would pursue," he said.
Atlantic Coast spokesman Rick DeLisi declined to comment on whether the airline had received bids from other carriers or investors. Instead, DeLisi said that Mesa's bid was "under active" consideration by its board and that the airline was continuing its normal operations as well as its planning to become a low-fare airline.
http://www.washingtonpost.com/wp-dyn/articles/A58830-2003Oct7.html
