Atlantic Coast Air Rejects Mesa Air Bid

[Smiliner]

DULLES, Va. (Dow Jones)--Atlantic Coast Airlines Holdings Inc.'s board unanimously rejected an unsolicited bid for the company made by Mesa Air Group Inc. (NasdaqNM:MESA - News) , reiterating its intent to establish a new low-fare air carrier.

In a press release Thursday, ACA described Mesa's expression of interest as " highly conditional."

On Oct. 6, the Phoenix-based Mesa Air proposed a $490 million stock swap that would have created a regional airline with $1.8 billion in annual revenue.

Mesa's efforts to gain control of ACA will now center around a proxy fight for control of the airline's boardroom. In an Oct. 15 filing with the Securities and Exchange Commission (News - Websites) , Mesa proposed a slate of seven directors to replace ACA's current board.

Atlantic Coast Air's attempted transformation into a new, low-cost carrier cleared another hurdle Thursday, as the company reached a preliminary agreement with representatives from the Air Line Pilots Association (News - Websites) that would result in a lower cost structure and create a pay scale for the flying of larger jets ACA plans to add to its fleet.

In a press release Thursday, the union said the tentative deal will enable the company to become an indepentant carrier, a move the union applauded.

ACA currently operates regional flights for UAL Corp.'s United Airlines and Delta Air Lines Inc. (NYSEAL - News) .

In late July ACA announced its plans to end its 14-year relationship with United - from which it currently draws about 85% of its revenue - and establish an independent airline.

Atlantic Coast Air is still bound by a 10-year agreement it reached with United in 2000, but an ACA spokesman said the company believes United will release it from that deal once UAL Corp. emerges from bankruptcy.

The tentative agreement with the pilots union must now be voted on by the union's full membership, after which point its implementation is conditional upon ACA's transformation to an independent airline.

Atlantic Coast has 148 commuter aircraft, including 118 regional jets.

 

[DEVO]

Hey ORNSTEIN.....
Take that... Oh...and by the way, How About THAT? AND WHAT ABOUT....THAT!
Hopefully, Jonny O. has his hands full dealing with the SEC now that the questions about the takeover have been asked. I was just thinking... There probably is going to be a need in Pheonix for a new Mesa Airline CEO. My sincere hope is that Mesa gets someone with some ETHICS to lead it.
This is probably the dieing bellows from a beast that has been mortally wounded. Jonny needs to be re-thinking his airlines game plan and restating his financial information. All of Mesa'a projections didn't include the cost of MAINTENANCE (Since most are covered under warentee). All of ACA's financials do include the cost of maintaining the fleet. If I were a stockholder at Mesa, not including the Maint. information could be construed as "Misleading" potential investors and could result in investor lawsuits (1996 all over again).

 

[AirBoard]

JO is sharing the bed with so many partners just to get a head. Pun intended!

 

[LawReview]

Fellow's:
I hate to burst your bubble. But, just because the ACA's board responded to JO's offer, doesn't mean this is through by a long shot. It's just considered the next step. ACA's BOD legally has to consider the offer. When It's rejected then JO can start his proxy fight for a takeover. It's business 101. This is what JO knew and wanted to happen. This is the way the SEC functions, the next step. And, (besides for propaganda) far from control of ACA's Board.

 

[texanpilot]

Business 101 - I was under the impression that JO missed that class.

 

[mesaba2425]

Business 101 - I was under the impression that JO missed that class.

You may not like the way he does things, but you can't deny he's a good businessman.

 

[Mayday911]

He didn't miss Business 101, he actually aced it. He did however miss Ethics 101 and Labor Relations 101.

Mayday

 

[exphojump]

Define good businessman,

How much has he grown revenue over the past five years?

How much has he grown stockholder equity in the last five years?

What kind of financing rates has he achieved on aircraft?

What is Mesa's cash position?

How badly is Mesa leveraged?

Look at the 98 10K and this year's results and you'll find he has accomplished nothing, but promise aircraft he cannot finance.

 

[acaTerry]

Well...

I've never, EVER been so proud of ACA as I am now. Go to he11 J.O.
ACA is too high class for you. Go buy another motorcycle and drive it into a wall....
Mesa is your "family"...glad I'm not one of your kids.

 

[WhiteCloud]

You may not like the way he does things, but you can't deny he's a good businessman.

Sure, he's pretty good at obtaining money for himself. He's into the short term deal which is all about taking. As soon as MESA gets big he'll just start up something else and drop them too.

 

[flyin4jsus]

Way to go ACA! I have good memories there. I don't want them ruined with Mesa coming in. Lets just face it Mesa probable can't get the financing for the jets so they want ACA's. I like the comments that Mesa says it wouldn't work out of KIAD and our cost structure. But don't put it past Kerry Skeen. And for all you ACA pilots that I've flown with keep your chins up and you guys are the best in the business. And just fight Mesa to the end. And never trade your ACA wings in, hold them to your heart.

Sincerely,

ex-flight attendant IAD Base

 

[crashpad]

Just heard on the radio this morning that Mesa will continue a hostile take-over...they (the business hosts) made it sound like ACA would have no control over their future, it might be decided in court and outcome in Mesa's favor. Could this really happen?

 

[surplus1]

Just a Thought

An Open Letter

TO:
The Board of Directors of Atlantic Coast Airlines
The Shareholders of Atlantic Coast Airlines
The Board of Directors of Mesa Air Group
The Shareholders of Mesa Air Group
Whom It May Concern

We the undersinged are airline pilots in the service of Atlantic Coast Airlines. As indicated by our signatures attached hereto, we are unanimously opposed to the proposed acquisition of Atlantic Coast by Mesa Air Group.

We share the belief of our Board of Directors and senior management that the proposed unfriendly takeover of Atlantic Coast by Mesa Air Group is not in the best interest of the Shareholders or employees of Atlantic Coast Holdings.

We pledge our loyalty to our Company and its future success as and independent Air Carrier.

We further pledge that in the event the unwelcome efforts of Mesa Air Group to acquire our Company should prove successful, on the date of the acquisition it is our intention to withdraw our services by individual resignation.

We sign this document without the prior knowledge or the consent of our Union which has not particpated in or encouraged in any way this independent and individual decision by each of us. This is not a work stoppage or strike. It is the individual decision of each person signing this document to freely exercise his/her Constitutional right to decline or accept employment with the entity of his/her choice.

We believe that our action will preclude the success or profitability of any new company that may be formed by Mesa Air Group, of Mesa Air Group itself and of Atlantic Coast or its successors.

We urge all shareholders of Atlantic Coast Airlines to reject the offers of Mesa Air Group in their current or future format and decline to transfer their shares.

By this letter we seek only to inform current and future shareholders that we are unwilling to serve as airline pilots in the service of any company under the direction or control of the current management of Mesa Air Group.

In that we are individually and collectively unable to directly affect the decisions of individual or institutional shareholders in this matter, our only avenue of protest is the individual resignation of our positions. We each intend to individually tender our resignation on any date that Mesa Air Group or any of its subsidiaries might acquire a controlling interest or a voting majority of the shares of Atlantic Coast Airlines or its parent.

Sincerely,

Individual signatures of each pilot.

Mechanics, Flight Attendans, CSR's, etc., might want to consider the same separately.

Run it by your private attorney(s). Keep it legal.

 

[skydrvr]

You may not like the way he does things, but you can't deny he's a good businessman.

WHATEVER!!!! In his own eyes maybe. In the eyes most "Good business man at the expense of those that he refuses to pay!" you have to be kidding. As stated Ethics 101 he did not take.