ExpressJet Rejects SkyWest Takeover

By by Gregory Polek

April 25, 2008
Air Transport and Cargo, Regional Airlines

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.

Back

All-business-class Airline Eos Goes Bankrupt April 28, 2008 Eos, the all-business-class airline launched in 2005, filed for Chapter 11 bankruptcy Saturday and flew its last flight yesterday. The Purchase,... [more]
Prosecution names Suter, Dosé in Indictments April 28, 2008 A Swiss federal prosecutor confirmed today that he will indict Moritz Suter, André Dosé and four former employees with management functions of... [more]
Republic, Frontier To Part Company April 24, 2008 Frontier Airlines yesterday said it reached a “mutual agreement” with Republic Airways to end their code-share agreement and gradually remove... [more]
Trans States Grounds ERJ 145s for Internal Audit April 16, 2008 St. Louis-based regional carrier Trans States Airlines canceled 12 flights last night and at least 40 more today to check nosewheel steering... [more]
Latest Superjet schedule shows first flight next month April 11, 2008 Russia’s Sukhoi expects its Superjet 100 regional jet to fly for the first time next month and likely not enter domestic airline service for at... [more]