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ExpressJet Rejects SkyWest Take Over Offer  
User currently offlineLAXintl From United States of America, joined May 2000, 24729 posts, RR: 46
Posted (6 years 2 months 2 weeks 6 days 12 hours ago) and read 6215 times:

Interesting stuff.
SkyWest previously had hinted at its interest in ExpressJet.

I'm glad for ExpressJet's sake they will indeed be reviewing all options available to the company including efforts to maximize shareholder value which has been decimated since launch of branded ops.

Quote:
ExpressJet Special Committee Rejects SkyWest's Unsolicited Proposal and Commences Review of Strategic and Operational Alternatives

HOUSTON, April 25 /PRNewswire-FirstCall/ -- ExpressJet Holdings, Inc. today announced that a Special Committee composed of independent outside members of its Board of Directors has unanimously rejected a proposal from SkyWest, Inc. to acquire the Company for $3.50 per share in cash.

The Special Committee, which was formed to evaluate the SkyWest proposal, has commenced a full review of strategic and operational alternatives available to ExpressJet. The strategic review will include, among other options, immediately engaging in discussions with SkyWest and other potentially interested parties to evaluate a merger at a higher price, as well as entering into discussions with Continental Airlines, Inc. regarding a new capacity purchase agreement.

The Special Committee reached the decision to reject the SkyWest proposal after careful consideration, including a thorough review of the proposal with Goldman Sachs & Co., its independent financial advisor, and Abrams & Laster LLP, its independent legal advisor.

In making today's announcement, ExpressJet cautions its stockholders and others considering trading in its securities that there can be no assurance that any definitive offer will be made, any agreement will be executed, or any transaction will be approved or consummated. The Company does not intend to disclose developments relating to this review unless and until the Special Committee and its Board of Directors has approved a specific agreement or transaction.

http://biz.yahoo.com/prnews/080425/nyf024.html?.v=101


From the desert to the sea, to all of Southern California
67 replies: All unread, showing first 25:
 
User currently offlineIAHFLYR From United States of America, joined Jun 2005, 4790 posts, RR: 22
Reply 1, posted (6 years 2 months 2 weeks 6 days 12 hours ago) and read 6196 times:

Oh yes very interesting news!

Sure do hope CO and ExpressJet get that new capacity purchase agreement in place quickly from a selfish passenger standpoint.



Any views shared are strictly my own and do not a represent those of any former employer.
User currently offlineLAXintl From United States of America, joined May 2000, 24729 posts, RR: 46
Reply 2, posted (6 years 2 months 2 weeks 6 days 11 hours ago) and read 6075 times:

Somewhat amazing the XJT board rejected the SKYW offer which was a near 75% premium on where the stock has been trading (~$2.00).

Hopefully they are right, and can create even higher shareholder value by engaging other parties, or options



From the desert to the sea, to all of Southern California
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5351 posts, RR: 7
Reply 3, posted (6 years 2 months 2 weeks 6 days 11 hours ago) and read 6041 times:



Quoting LAXintl (Reply 2):
Somewhat amazing the XJT board rejected the SKYW offer which was a near 75% premium on where the stock has been trading (~$2.00).

Routine ploy. They are looking for more; better yet, a competing bid.



I love long German words like 'Freundschaftsbezeigungen'.
User currently onlineGoldenshield From United States of America, joined Jan 2001, 5961 posts, RR: 14
Reply 4, posted (6 years 2 months 2 weeks 6 days 11 hours ago) and read 6041 times:



Quoting LAXintl (Reply 2):
Hopefully they are right, and can create even higher shareholder value by engaging other parties, or options

Or even soliciting a hostile takeover.



Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
User currently offlineEnilria From Canada, joined Feb 2008, 6999 posts, RR: 13
Reply 5, posted (6 years 2 months 2 weeks 6 days 11 hours ago) and read 6008 times:

I don't know why Skywest would want all those dead weight 50 seat RJs. That seems a little odd to me. This is the beginning of the end for the ExpressJet branded flying. This will start the pressure to kill it. If they want to remain independent they should announce "Step to Maximize Shareholder Value" and shut down the branded airline.

User currently offlineFATFlyer From United States of America, joined May 2001, 5789 posts, RR: 15
Reply 6, posted (6 years 2 months 2 weeks 6 days 11 hours ago) and read 5981 times:

At 10:25AM ET the stock is at $2.95 up 0.86 from yesterday.


"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain
User currently offlineMKENut From United States of America, joined Jul 2007, 699 posts, RR: 1
Reply 7, posted (6 years 2 months 2 weeks 6 days 11 hours ago) and read 5948 times:

I think they are shopping for a buyer because they already have a subcommittee formed for that reason.

User currently offlineImapilotaz From , joined Dec 1969, posts, RR:
Reply 8, posted (6 years 2 months 2 weeks 6 days 11 hours ago) and read 5949 times:

Guys remember Skywest has so many 50-seaters that are leased at ASA and OO, that they may be able to absorb the branded 50 seat aircraft into other contracts by just having lease returns off the almost 300 CRJ-200s that they operate currently. The CO flying would be hugely profitable for Skywest.

I also see Skywest going after the remnants of Mesa once the whole mess with AQ & HA goes by the wayside.


User currently offlineJayDub From , joined Dec 1969, posts, RR:
Reply 9, posted (6 years 2 months 2 weeks 6 days 9 hours ago) and read 5755 times:

Quoting Enilria (Reply 5):
I don't know why Skywest would want all those dead weight 50 seat RJs. That seems a little odd to me.

I don't think it's necessarily about the planes. Methinks it is more about SkyWest getting their ducks in a row in anticipation of a CO/UA merger...

I look at this as a sign that CO/UA will be a done deal very soon...

[Edited 2008-04-25 09:59:00]

User currently offlineFlyingcat From United States of America, joined May 2007, 538 posts, RR: 0
Reply 10, posted (6 years 2 months 2 weeks 6 days 8 hours ago) and read 5635 times:



Quoting JayDub (Reply 9):
don't think it's necessarily about the planes. Methinks it is more about SkyWest getting their ducks in a row in anticipation of a CO/UA merger...

I look at this as a sign that CO/UA will be a done deal very soon...

In the case of a merger or not the last thing any regional should be trying to do is purchase more 50 seaters. They are literally skyrocketing to the top of the CASM list.

Skywest may be looking at them more from liquidation point of view.

The ERJs may be a lot more valuable in another country or XJ has some very valuable assets to sell that are worth more than the price they offered.


User currently offlineKingCavalier From United States of America, joined Nov 2006, 1302 posts, RR: 18
Reply 11, posted (6 years 2 months 2 weeks 6 days 7 hours ago) and read 5562 times:

The market is loving Skywest's interest in XJT. XJT's stock is up 0.97 (+46.41%).


Travel is fatal to prejudice, bigotry, and narrow-mindedness
User currently offlineMKENut From United States of America, joined Jul 2007, 699 posts, RR: 1
Reply 12, posted (6 years 2 months 2 weeks 6 days 7 hours ago) and read 5486 times:



Quoting Flyingcat (Reply 10):
The ERJs may be a lot more valuable in another country or XJ has some very valuable assets to sell that are worth more than the price they offered.

I agree... the ERJs would be a very valuable asset for Skywest. Love to see them flying Midwest Connect routes but I know that wouldn't happen anytime soon if the merger with Express Jet were to happen.


User currently offlineJayDub From , joined Dec 1969, posts, RR:
Reply 13, posted (6 years 2 months 2 weeks 6 days 7 hours ago) and read 5465 times:

I don't think SkyWest is looking for a merger. They are looking for an acquisition to operate independently under the SkyWest, Inc. banner...much like ASA.

And before you start talking about the ASA acquisition being a disaster...take a look at the turn-around they are making.


User currently offlineB757capt From United States of America, joined Feb 2004, 1364 posts, RR: 0
Reply 14, posted (6 years 2 months 2 weeks 6 days 7 hours ago) and read 5453 times:



Quoting JayDub (Reply 9):
I don't think it's necessarily about the planes. Methinks it is more about SkyWest getting their ducks in a row in anticipation of a CO/UA merger...

I look at this as a sign that CO/UA will be a done deal very soon...

I sure hope thats the case!



The views written by this user are in no manner the views of my employer and should not be thought as such.
User currently onlineGoldenshield From United States of America, joined Jan 2001, 5961 posts, RR: 14
Reply 15, posted (6 years 2 months 2 weeks 6 days 6 hours ago) and read 5387 times:

Here's the latest from the AP about SkyWest's offer:

http://biz.yahoo.com/prnews/080425/laf517.html?.v=4

Quote:

“We believe our offer is consistent with our strategy of pursuing viable opportunities to enhance shareholder value, while also offering value to Continental through a new code-share relationship” commented Bradford R. Rich, SkyWest Executive Vice President and Chief Financial Officer.



Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
User currently offlineJayDub From , joined Dec 1969, posts, RR:
Reply 16, posted (6 years 2 months 2 weeks 6 days 6 hours ago) and read 5362 times:

Go here, type in ExpressJet's stock ticker (XJT), click the first few links, and read away. Very, VERY interesting stuff to say the least. Letters between CO, OO, and XE CEO's...looks almost like a deal will be done, one way or another.

Securities and Exchange Commission EDGAR Filings Search

[Edited 2008-04-25 12:40:42]

User currently offlineOuboy79 From United States of America, joined Nov 2001, 4542 posts, RR: 22
Reply 17, posted (6 years 2 months 2 weeks 6 days 6 hours ago) and read 5360 times:

Yup...just another company to add to the Skywest umbrella. ExpressJet isn't totally apposed to the idea. They are negotiating a higher price with Skywest.


Any opinion/comment posted is that of my own and not that of Southwest Airlines Co.
User currently offlineAlias1024 From United States of America, joined Oct 2004, 2741 posts, RR: 2
Reply 18, posted (6 years 2 months 2 weeks 6 days 5 hours ago) and read 5301 times:



Quoting Ouboy79 (Reply 17):
Yup...just another company to add to the Skywest umbrella. ExpressJet isn't totally apposed to the idea. They are negotiating a higher price with Skywest.

That's how I read it, but they are playing a dangerous game of chicken with the boys in St. George.

As was noted in the letter by Mr. Misner, Continental intends to eliminate a further 51 aircraft from the XJT CPA unless XJT gives CO some good savings. This loss combined with the $130 million in XJT convertable notes which are redeemable this summer could put XJT in a world of hurt. What happens if SKYW decides not to up the offer?

Right now SKYW is the only regional with the cash on hand to offer $180 million in cash without severely impacting their liquidity position. If the deal doesn't happen and CO pulls the XJT flying, what's to prevent CO from giving 25-30 aircraft worth of flying to SKYW under the terms they have already negotiated for the XJT flying? DL would probably be happy to move the 50 seaters out of their network in exchange for 20 CRJ-700 (the Horizon ones come to mind), and OO moves the 50 seat aircraft to Continental flying.

I'm not sure it's worth the risk for XJT to play these games, given the large premium and all cash offer that SkyWest was already offering.



It is a mistake to think you can solve any major problems with just potatoes.
User currently offlineLAXintl From United States of America, joined May 2000, 24729 posts, RR: 46
Reply 19, posted (6 years 2 months 2 weeks 6 days 5 hours ago) and read 5277 times:

Yes quite interesting to note that Skywest in effect has a deal ready to go with Continental pending a takeover of ExpressJet.

Basically makes this a low risk for SKYW as it provides long term revenue stability with a takeover of XJT, something that is far from sure with a stand alone XJT.

This revelation pretty much confirms the rumors from the CO board meeting two weeks ago where the carrier did indeed decide to ditch the 51 additional XJT planes barring rate reductions by XJT.

In my opinion - good deal for all parties particularly for ExpressJet whose future becomes more secure under the SkyWest umbrella and XJT investors get something for the lemons which they currently hold.



From the desert to the sea, to all of Southern California
User currently offlineLawnDart From United States of America, joined May 2005, 969 posts, RR: 3
Reply 20, posted (6 years 2 months 2 weeks 6 days 4 hours ago) and read 5164 times:



Quoting Enilria (Reply 5):
I don't know why Skywest would want all those dead weight 50 seat RJs. That seems a little odd to me.

1.) Is Skywest prepping for a UA/CO merger?

2.) Is Skywest diversifying their client base?

3.) Are they looking to get rid of branded flying because it competes with UA Skywest?

4.) All of the above?


User currently offlineImapilotaz From , joined Dec 1969, posts, RR:
Reply 21, posted (6 years 2 months 2 weeks 6 days 4 hours ago) and read 5136 times:

Here's a very interesting thought, and i have no idea how to figure this out with public information.

One of the most profitable elements for any regional airline is their ground handling contracts, which SkyWest has over 100 stations. XJET also has 100+ stations I believe... how many of them are common? Right off the bat, you would be able to save 30-50% of your personnel by being able to share employees. Right now its very common to have SkyWest handle both UAX & DLC in the same place. What better way for SkyWest to make even more money than to have in the same place UAX, DLC & COX? Your handling contacts are already in place, so if you can manage to save even more moneny than what you contracted it out originally at, Skywest can just pocket the difference.


User currently offlineLAXintl From United States of America, joined May 2000, 24729 posts, RR: 46
Reply 22, posted (6 years 2 months 2 weeks 6 days 4 hours ago) and read 5113 times:

Well the number of XJT staffed stations will be dropping fast, as CO has put out for bid many of them over the next several months. CO simply does not want to deal with XJT cost in the air, or on the ground.


From the desert to the sea, to all of Southern California
User currently offlineXJET From United States of America, joined Feb 2007, 491 posts, RR: 2
Reply 23, posted (6 years 2 months 2 weeks 6 days 3 hours ago) and read 5055 times:

This deal is far from finished. If you look at the letters cited above, SKW management wants XJET ALPA to make a letter in our contract null and void. That letter deals with our "scope" if you will. Basically it garuntees our jobs in a merger and the terms that define the ALPA seniority integration policy. Plainy stated, that will be a tough nut to crack. Skywest is basically asking XE pilots to give up one of the few things that gives us any comfort. Were it not for that, I dont think the pilots of XE would have a problem with the acquisition. There is a lot of talking left to be done, but I dont see the fat lady singing on this deal yet. There will be another offer.

User currently offlineLAXintl From United States of America, joined May 2000, 24729 posts, RR: 46
Reply 24, posted (6 years 2 months 2 weeks 6 days 3 hours ago) and read 5051 times:

Well XJET pilots can swallow hard and make a deal with SKYW (which itself has a very happy pilot group - just recently having refused union representation), or take their chances with a stand alone ExpressJet operation with branded ops continuing to bleeding cash, while CO having confirmed it was going to be serving notice by June 28th on dropping 51 planes in 2009, and ending the entire CPA come 2010.


From the desert to the sea, to all of Southern California
25 Briguy1974 : Please make this happen. This rumor has circulated around OO for a long time. I truly believe the OO mgmt. team is one of the finest in the industry a
26 Modesto2 : It's certainly no secret that ExpressJet is on the edge, but based upon personal conversations and the results of the SkyWest pilot vote, I'm NOT con
27 Hiflyer : I fully agree....UA major express is SKW (putting bid in on Xjet) and Republic (getting 170's away from F9) CO major express is Xjet....and CO has al
28 VictorKilo : One possible scenario I see out of a merged SkyWest/ExpressJet is an agreement with Alaska/Horizon, where ExpressJet would discontinue all markets eas
29 IAD51FL : How many CRJ-200's does Skywest currently operate? Chris
30 Alias1024 : It says "clarification, and/or amendment". Basically, SKYW wants assurance that the CBA with XJT pilots will not force them to merge the seniority li
31 JayDub : SkyWest Airlines... (140) CRJ-200 aircraft (51 DLC, 68 UAX, 21 YXC) Atlantic Southeast... (92) CRJ-200 aircraft (All for DLC) Combined... 232 CRJ-200
32 XJET : I definitely see your point. Like I said, XE pilots aren't against merger in totality. However, that one section of our contract denies XE pilots the
33 ThePinnacleKid : It's in ExpressJet pilots best interest to protect their job security.... the issues that SkyWest management want is for clarification that they can
34 Azncsa4qf744er : SkyWest's ground handling can only be done at out/small stations. They cannot ground handles both at hubs, with the exception of LAX. United release
35 XJET : I couldn't agree more. It is all a question of job security and maintaining the t gains that ewe made in 2004. Our pay rates are not exorbitant and t
36 Alias1024 : I understand this. I understand the importance of scope, and don't deny that elimination of the clause would allow management to transfer aircraft an
37 DurangoMac : One note that is clear from the letters that this is an acquisition not a merger. In my opinion after reading the letters it that Expressjet will sti
38 Drewwright : Funny, such a bold statement coming from someone whose job and livelihood isn't on the line. If I'm not mistaken, the scope letter implies that Expre
39 Cubsrule : OO cannot fly anything but LAX-SLC for DL per their contract with UA.
40 Allstarflyer : But which regionals are going to dance with which majors after the majors are done merging?
41 Skyrat : United released OO from that in Oct'07. They can now fly for any other airline out of LAX now.
42 Cubsrule : Mergers don't abrogate contracts with regionals... they'll still be there (and regardless of who UA merges with, OO STILL will be limited in their ab
43 Alias1024 : Skywest was able to get United to change the terms of the contract several months ago. They are now allowed to fly for other airlines from LAX.
44 TOLtommy : But where are those planes going to go? XE has to generate some revenue with them, the monthly payments are still due to CO for the aircraft. CO isn'
45 XJET : Ah, but you forget the #1 rule of a.net. Pilots suck. We are the only reason an airline ever fails. Revenue down? Cut pilot pay.
46 JayDub : I wouldn't go that far because I know better...but I will say that alot of that perception is based on the "Me, Me, Me, the world revolves around me.
47 XJET : I surely understand the perception that pilot's end up controlling others futures when there are strikes, etc. However, pilots aren't the only ones t
48 Cubsrule : Very well-said, and (from a non-pilot perspective) absolutely right. Billboards, for example, piss people off. They do not change minds.
49 ACVitale : While I understand many of the emotions that are in play..... A few thoughts on the quality of decision making and thought processes amongst certain a
50 Alias1024 : ACVitale, I agree with most of your post, but have to disagree on this point. Based on the statements made by SkyWest, management is not looking for p
51 Laxintl : Good post, with all fair observations. I believe its important for everyone to remember that ExpressJet finds itself where it is these days solely ba
52 ThePinnacleKid : ACVitale: I have to say.. I respect a lot of your views on the XE situation... they are well thought out and remarkably very level headed... I tend to
53 ACVitale : While I would agree on the base pay, We must also include the double ended retirement plans, work rules, and per dium. Hence, I maintain my stance th
54 AgentXE1225 : Hear hear!! Appreciate the encouragement as we are a bid edgy these days.
55 Jumbojettim : All airline employees (rampers, FA's, pilots, ground etc) need to stand strong and NOT take paycuts, and NOT change work rules. It is time for the ai
56 Cubsrule : Sort of a Hobson's choice, isn't it? High fares are arguably bad, but so too is no air travel. At least WN makes money.
57 KAUSpilot : Wow, I make $60,000 dollars a year as a 4th year jet captain. I get no more than 14 days of vacation per year. What an outrageous compensation and be
58 Jumbojettim : Only reason WN is making money is their fuel hedge. Give a couple more years.
59 Cubsrule : It's definitely arguable, but as long as SOMEONE is making money, it's tough to suggest that current fare levels are unsustainable.
60 MasseyBrown : In retrospect, then, would you say ExpressJet should have returned the first 69 jets to CO and attacked their costs while flying the rest of the flee
61 JayDub : Bingo. Not one soul in the rank-and-file of this industry are overpaid. ALPA does a rather piss poor job of doing what a union is supposed to do...UN
62 Jumbojettim : I've got an idea as to what we can do next weekend, here's a list of options a.) go the yacht club and hang out on my sloop b.) cruise the back roads
63 JBo : The only way ERJs would be painted in YX colors is if YX were to contract with ExpressJet over SkyWest. The way I see it, as do many others, is that
64 AgentXE1225 : AMEN TO THAT!!!! The company has cut budgets in every reasonable area that they can think of, but employee pay is one area that Jim & company are jus
65 EssentialPowr : XJET should have accepted the offer; the logo of a 50 seat RJ is exceptionally short sighted and singular in perspective.
66 XJET : Yes! One of the good things that everyone fails to realize about XE is that employee compensation is good enough to yield good results. No one, and I
67 AgentXE1225 : Maybe the average consumer who gets a dirt-cheap fare. As far as the refundable full-fare elite passenger goes, they definitely have a higher expecta
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