ACA shareholders asked to sit tight

[Rottweiller]

Mesa Air makes move on ACA board
ACA tells shareholders to stand put on stock offer
By August Cole, CBS.MarketWatch.com
Last Update: 12:34 PM ET Oct. 15, 2003


SAN FRANCISCO (CBS.MW) -- Mesa Air Group has made a move to replace Atlantic Coast Airlines' board after Atlantic Coast told shareholders to stand put and wait for the board to go over a more than $500 million stock buyout offer from Mesa.

Atlantic Coast (ACAI: news, chart, profile) said Tuesday evening that the board would meet in "due course" to look at the Oct. 6 offer and then will tell shareholders what they should do. Shares added 6 cents to $12.51. Shares of Mesa Air (MESA: news, chart, profile) rose 2 cents to $12.12.

Mesa Air detailed the move in a letter to Atlantic Coast's board and SEC filings, a step toward getting shareholders to approve the seven nominees who would be friendlier to its .09-share offer or another overture.

"We are taking steps to give ACA shareholders the opportunity to replace existing directors with those who are committed to fairly considering our offer or a similarly attractive alternative," said Mesa Air CEO Jonathan Ornstein in a statement. Mesa also wants Atlantic Coast's board to get rid of the so-called "poison pill" rules that it says prevent a direct offer to shareholders.

Mesa Air wants to buy Atlantic Coast so that it will become what would be the largest regional airline in the country. Atlantic Coast is on its way out of that market, however, as it ends its ties to United Airlines (UALAQ: news, chart, profile). Instead, Atlantic Coast wants to be a low-fare carrier, flying out of the Washington area. But Mesa's takeover would stop that transformation and instead support Mesa's growing relationship with bankrupt United.

 

[Machdog1]

I like the last sentence in that article, "Bankrupt United" why does anybody want to be a part of that!

 

[Heavy Set]

I hope ACA has the BALL$ and the legal right to say no and to go for the new LCC - maybe with Richard Branson. Why would any ACA pilot be in favor of working for the next Frank Lorenzo? Say goodbye to any raises in the future - a future full of suspense and misery... I wouldn't want to ride the JO rollercoaster...

 

[vtchaz]

Not a pilot decision

I always get a kick out of how pilots think these decisions are somehow up to them and they have some measure of control. You don't in this one. This one is all up to the shareholders. Management only has limited options as well. So unless you own a very large chunk of ACA stock then you can only hope those that do think the LCC will make them more money. I hope that's the way it pans out and would definitely like to see ACA independent.

 

[phishhman]

Pardon me for being naive, but how could this transaction take place? Does JO just offer x amount of Mesa stock to replace the ACA stock and thus making Mesa the largest share owner of ACA stock, giving them control of ACA? Do the shareholders have a choice in this? If they decide that they believe in the future plans of ACA, could they nix this whole thing?