SkyWest Had Made Hostile $3.50/Share Bid For ExpressJet

[Future Furlough]

Continental apparently doesn't really want to do business with XJT anymore. You guys are burning through money quickly and you have $130 million bond due this summer. The branded flying is a failure. What choices do you have?

I always have the choice not to accept concessions or inferior work rules. I walked away from one crappy concession contract forced down my throat, I won't hesitate to do it again. :angryfire

Everyone bitches about the race to the bottom but no one wants to do anything about it. Sometimes it's painful to stop the slide.:uzi:

 

[Erlanger]

Latest and the greatest off the wire:



ExpressJet shares soar by nearly half following SkyWest bid

April 25, 2008
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All Associated Press news
NEW YORK (AP) - ExpressJet Holdings Inc. shares jumped by more than half Friday after the regional carrier rejected a rival's takeover bid as too cheap, but signaled it might be willing to sell for the right price.
The Houston airline said SkyWest Inc.'s offer of $3.50 per share undervalues the company, which mainly operates connecting flights under contract to Continental Airlines Inc. and Delta Air Lines Inc. It also said it was establishing a committee to review "strategic and operational alternatives" to the bid.
"The initial SkyWest offer is inadequate and represents an opportunistic attempt by SkyWest to acquire the company at a price well below the true value that ExpressJet would bring to a combination," ExpressJet said in a statement.
ExpressJet shares have been hammered along with other airline stocks in recent months as the economy soured and fuel prices soared. The stock was trading above $6 per share as recently as July, although it has not broken above the proposed purchase price since mid-February.
While the company said SkyWest's existing offer does not fairly reflect ExpressJet's value, it did acknowledge that the combined company "would likely produce meaningful synergies." That suggests ExpressJet might be willing to consider a higher offer.
"We believe that ExpressJet management would be open to a higher offer, which SkyWest may be willing to make," Calyon Securities analyst Ray Neidl said in a note to investors. He added that "we have doubts about ExpressJet's ability to survive in the long run and think that ExpressJet would be wise to consider the current offer."
SkyWest Vice President of Finance and Treasurer Mike Kraupp declined to comment when asked whether SkyWest might consider raising its bid. The company said in a statement it was disappointed by the rejection and planned to review its options, which could include altering or withdrawing its offer.
"The ball is back in our court," Kraupp said.
A representative for ExpressJet could not immediately be reached for comment.
Airlines of all sizes have come under increasing pressure to cut costs and boost revenue in the face of rapidly rising fuel prices, and a number of smaller carriers have gone out of business or turned to bankruptcy protection in recent weeks. Many industry observers argue that more consolidation is needed for the industry to remain viable.
Earlier this month, Delta and Northwest Airlines Corp. agreed to combine to create what would be the world's biggest airline. Other large carriers have reportedly been in talks about tie-ups of their own.
Neidl said trading in ExpressJet shares suggests the market believes there is a 50/50 chance the deal could go through, although he believes the odds are better because shareholders will likely pressure ExpressJet to sell. He rates the stock "Neutral."
"If a deal is not consummated, we believe the stock would revert to its pre-offer level around $2 per share," Neidl added.
ExpressJet shares surged $1.16, or 55.5 percent, to close at $3.25.

If there's no other airlines making a bid for XJT too, which there doesn't seem to be, Skywest will wait it out. Skywest will eventually get what they want from the shareholders and pilots.

 

[BoilerUP]

Skywest will eventually get what they want from the shareholders and pilots.

So...what do they want from the XJT pilots?

Be specific.

 

[Erlanger]

So...what do they want from the XJT pilots?

Be specific.

Have you not been reading all the posts? Here's specifically what Skywest wants involving the pilots.

This proposal is also conditioned upon ExpressJet obtaining a clarification and/or amendment, satisfactory to us, to the collective bargaining agreement (the “CBA”) between ExpressJet Airlines, Inc. and the pilots in the service of ExpressJet Airlines, as represented by the Air Line Pilots Association, International (“ALPA”), dated December 1, 2004. First, we need clarification that nothing in the CBA (including, but not limited to, Section 1.D.3) would obligate us to merge the operations of ExpressJet Airlines with those of any or all of our currently-owned airline subsidiaries, or any airline subsidiaries we may acquire in the future, or otherwise apply to us or any of our subsidiaries or affiliates (other than ExpressJet and its subsidiaries). Secondly, we need the agreement of ALPA that the certain undated letter among ExpressJet, XJT Holdings, Inc., ALPA and the ExpressJet MEC, appended as pages 223 through 226 of the CBA, shall be revoked and deemed null and void, prior to the conclusion of the acquisition.

 

[BoilerUP]

Have you not been reading all the posts? Here's specifically what Skywest wants involving the pilots.

Yes, indeed I have been reading all the posts.

Your posts indicate that you think XJT pilots are between the proverbial rock and a hard place, with no options other than acquiescing to Jerry Atkins' demands.

What incentive do you think XJT ALPA would have to willingly negotiate away their contractual language that would bind SKW, Inc. to their Section 1?

 

[TEXAN AVIATOR]

The scope language that was incorporated into Contract 2004 by the XJT ALPA group effectively handcuffs ExpressJet holdings and or their successor to using pilots on the ExpressJet seniority list to accomplish that flying. If a company was to purchase XJT and then (as it appears SKYW has done) re-negotiates the CPA with CAL they still have to use the XJT pilots as they "own" the flying that is done by XJT holdings. SKYW most likely can not give CAL a price low enough to secure the flying by using XJT pilots. SKYW is asking for XJT to re-negotiate the Collective Bargaining Agreement with XJT ALPA to remove this part of the scope language to facilitate their purchase of XJT holdings.

I can only speak for myself on this, but I will probably never support weakening the scope language in contract 2004. There is a good reason why that language is there (read Freedom Air), and there is no reason why it should be changed to let SKYW eliminate our pilot group and our superior contract. If Jerry wants XJT he can have us as we are, not how he thinks we should be.

Exactly my thoughts. XJT pilots are one of the most unified group around these days. I won't support it either, I doubt you'll get this pilot group to budge.

 

[Ben Dover]

I can only speak for myself on this, but I will probably never support weakening the scope language in contract 2004. There is a good reason why that language is there (read Freedom Air), and there is no reason why it should be changed to let SKYW eliminate our pilot group and our superior contract. If Jerry wants XJT he can have us as we are, not how he thinks we should be.

If it's any consolation the ASA vs Skywest whipsaw doomsday talk has for the most part remained just that; talk. It's always possible, but so far really hasn't materialized. I expect Expressjet under the Skywest umbrella would fair as well.

I respect your contract and all the work it took to secure it. But if you're out of work, what good is an industry leading contract?

 

[Future Furlough]

I respect your contract and all the work it took to secure it. But if you're out of work, what good is an industry leading contract?

Why fight for a contract if you're not willing to stand up for it? There is no incentive for me to settle less pay. I can make what I do now doing something else, and be home every night

 

[Erlanger]

Yes, indeed I have been reading all the posts.

Your posts indicate that you think XJT pilots are between the proverbial rock and a hard place, with no options other than acquiescing to Jerry Atkins' demands.

What incentive do you think XJT ALPA would have to willingly negotiate away their contractual language that would bind SKW, Inc. to their Section 1?

It's one thing to play tough guy on these forums and then there's the reality of things to come. Reality is you will be furloughed or worst (most likely) the whole place is shut down like an ACA/Independence. Remember them? How's that for an incentive? And who's hiring these day? And if the President and BODs of XJT decide they finally want this deal, they'll get you guys to acquiesce.

 

[BankAccount=0$]

Continental apparently doesn't really want to do business with XJT anymore. You guys are burning through money quickly and you have $130 million bond due this summer. The branded flying is a failure. What choices do you have?

In this instance we (the pilot group of XJT) have a couple of choices. We can accept the demand of SKYW and give up the very protection that keeps us at the top of the compensation heap in the regional segment. We can think this through and see exactly where allowing SKYW to have the ability to eliminate our jobs through moving aircraft/flying to the OO side of the house. We can also wait and see what happens in the future without caving in and giving a would be suitor the right to force us to change our hard fought contractual rights.

My own company has NEVER come to my pilot group with their hand out seeking concessions. Why in the h*ll would I want to hand Jerry the keys to the kingdom and ultimately see my job be replaced by his lower paid (errr I mean more productive) workforce.

I haven't touched an airplane in a month because of my contracts vacation rules, can a SKYW 3rd year guy say the same?? We fought hard to get this contract, and I doubt you're gonna see us throw any part of it away to suit ANY airline looking to purchase us in the future.

Are any of these good choices? probably not, is there going to be an XJT 2,3,4 years from now? who knows, but I don't think giving up contractual rights for a mythical future security is a good idea.....

 

[BoilerUP]

It's one thing to play tough guy on these forums and then there's the reality of things to come. Reality is you will be furloughed or worst (most likely) the whole place is shut down like an ACA/Independence. Remember them? How's that for an incentive? And who's hiring these day? And if the President and BODs of XJT decide they finally want this deal, they'll get you guys to acquiesce.

Ah yes...nothing quite motivates like fear.

And I don't work for Expressjet.

 

[Ben Dover]

Why fight for a contract if you're not willing to stand up for it?

Because you may be out of a job if you're not willing to give a little...

There is no incentive for me to settle less pay. I can make what I do now doing something else, and be home every night

Then maybe that's a good option for you. However I suspect there are others who would be willing to compromise in order to keep working. Mind you, I'm not talking about compromising pay. ASA pilots haven't taken a pay cut since Skywest took over. I'm just suggesting some compromise on scope might be worth keeping a job.

 

[Erlanger]

It's one thing to play tough guy on these forums and then there's the reality of things to come. Reality is you will be furloughed or worst (most likely) the whole place is shut down like an ACA/Independence. Remember them? How's that for an incentive? And who's hiring these day? And if the President and BODs of XJT decide they finally want this deal, they'll get you guys to acquiesce.

Acquiesce - ac·qui·esce [ak-wee-es] –verb;
to assent tacitly; submit or comply silently or without protest.

My bad. Wrong word to use.

 

[BankAccount=0$]

Also I forgot to add in my above post. I have no ill will towards SKYW management or the pilot group. We all needed a job at one time and if SKYW was the place a pilot thought was a good fit for them then so be it. I happened to come to XJT by way of another airline. This is just purely a discussion on giving away contractual rights to placate a would be suitor.

I think just about everybody can see the writing on the wall if XJT ALPA was to give up scope in this instance. If SKYW wanted to run us as a seperate entitiy like ASA they would not be making this request for us to allow the CBA to be changed

 

[USCtrojan]

Here's a scenario. What if SkyW Inc. announces they are retracting the offer. What happens to the stock? My guess is it will tank. It will go back to where it was or likely lower. When that bond becomes due, XJT will have no more cash. SkyW Inc. may acquire XJT for less than the 188 million offered. Or, CAL will announce they are taking more flying away from XJT therebye causing the stock to tank even more. Either way, I feel the mgmt of XJT are between a rock and a hard place. This isn't even chess for them. It's survival. For once, the employees stand to gain from this. XJT contract will stay in tact, other than merging with any other SKY INc. airlines. Everything will remain status quo, except your mgmt. team--who seem to be destroying your airline. This isn't a bad thing, I can tell you because I've been through it.

Trojan