Virgin America Inc (fka VA)

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The Wall Street Journal
THE WALL STREET JOURNAL
Alaska Air expected to announce Virgin America deal Monday
By Susan Carey , Robert Wall , and Dana Mattioli
Published: Apr 3, 2016 5:18 p.m. ET

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Frenzied bidding war with JetBlue apparently results in $2.5 billion acquisition
Bloomberg News
Alaska Air Group Inc. is expected to announce Monday that it won the auction for Virgin America Inc., besting rival JetBlue Airways Corp. in a frenzied bidding process that culminated in a cash price of about $2.5 billion, according to people familiar with the matter.

This new chapter in airline consolidation amid low-fare carriers comes at a premium. The deal signed Friday night, according to one of the people, was more than $1 billion over Virgin America’s VA, +0.88% market capitalization on Friday, which had started to rise last month on takeover speculation.


Bidding between Alaska Airlines’ ALK, -0.01% parent and JetBlue JBLU, +0.99% was feverish, this person said, with the price continuing to rise. Alaska prevailed in part because of its clean balance sheet, which will allow it to more easily borrow funds for the acquisition, the person said.


A person familiar with the jousting said it was “a fierce back and forth between the two sides, with multiple bids for a number of days.” But ultimately, JetBlue “put the pencil down” because the price had gotten too high.

The combination of Alaska and San Francisco-based Virgin America, which is expected to undergo scrutiny from the U.S. Justice Department, would create the No. 5 U.S. airline by traffic, eclipsing JetBlue, which currently holds that spot.

An expanded version of this report appears on WSJ.com.

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