Branson profits as Alaska Air buys Virgin America for $4bn
Alaska Air has won the battle to take over Virgin America with a higher than expected offer of $57 a share that, all in all, values the carrier at roughly $4bn and is set to earn Sir Richard Branson a healthy profit.
VIRGIN AMERICA
$56.97
11:00 27/12/16
The combined company will become the fifth largest US airline and provide around 1,200 daily departures.
Richard Branson, who owns just over 30% of the airline's stock via his VX Holdings vehicle, originally floated Virgin America, which is separate entity from Virgin Atlantic, on the Nasdaq in a November 2014 initial public offer priced at $23 per share.
At Friday's stock market close the stock stopped changing hands at $38.90.
.@VirginAmerica succeeded in the impossible: creating an airline that people love https://t.co/z4GZ1RJPQP pic.twitter.com/l8ILaFbSr5
— Richard Branson (@richardbranson) April 4, 2016
Alaska Air said it will pay exactly $57.00 per share in cash, which when it included existing Virgin America debt and capitalized aircraft operating leases, values the whole enterprise at around $4bn.
The carrier, which is headquartered in Seattle, said the combination would expand Alaska Airlines' existing footprint in California, bolster its platform for growth and would give it more strength to compete with the four larger US airlines.
Combining Alaska Airlines' core markets in the Pacific Northwest and the state of Alaska with Virgin America's strong foundation in California will make the enlarged group "the go-to airline", the company said, for the 175,000-plus daily passengers using Golden State airports, including San Francisco and Los Angeles.