Houston-based regional airline ExpressJet said today that a committee composed of independent outside members of its board of directors has unanimously rejected a proposal from St. George, Utah-based SkyWest to acquire the company for $3.50 per share in cash.
Formed specifically to evaluate the SkyWest proposal, the committee has started reviewing other alternatives, including entering talks with SkyWest and other potentially interested parties to evaluate a merger at a higher price. It also plans to review the possibility of a new capacity purchase agreement with Continental Airlines, ExpressJet’s main code-share partner.
ExpressJet said the committee’s decision to reject the offer hinged on several factors, including its belief that the $3.50 proposal doesn’t reflect the fair value of the company’s stock. It also said it believes that although a merger would produce meaningful “synergies,” it would not deliver synergistic value to ExpressJet’s shareholders.
At today’s opening of the New York Stock Exchange, ExpressJet shares traded at $2.70. “The ExpressJet Board and management are committed to taking all appropriate and necessary actions to enhance value for ExpressJet stockholders,” said Pat Kelly, chairman of the special committee. “As the special committee reviews the strategic alternatives available to the company, we have a solid management team and employees dedicated to providing our customers with exceptional service and conducting business as usual.”
The company said it does not intend to disclose developments relating to the committee’s review unless it approves a specific agreement or transaction.