Hawaiian Holdings shares almost triple after Alaska Air’s $1.9 bln buyout offer
Shares of Hawaiian Holdings (HA.O), the parent company of Hawaiian Airlines, nearly tripled on Monday following a deal with Alaska Air Group (ALK.N) to acquire it for $1.9 billion, including debt.
The company’s shares, which have taken a hit in recent months, were trading at $13.40 in morning trade, below Alaska’s offer price of $18 per share made public on Sunday. Some analysts have expressed doubts regarding regulatory approval.
Hawaiian shares have dropped 52.6% so far this year, as the company has faced challenges including the impact of Maui wildfires, high fuel costs, and jet engine recall issues.
The deal, valued at $929.4 million on an equity basis, is expected to expand the networks of both airlines and offer more choices to passengers. Alaska hopes to grow in the lucrative Asia Pacific market, while Hawaiian customers can travel non-stop to the U.S. mainland.
“This transaction makes good common sense for both airlines,” TD Cowen analyst Helane Becker wrote in a note.
However, regulatory resistance to the merger is a possibility under the Biden administration, as the Justice Department had previously filed a lawsuit to stop JetBlue from buying Spirit Airlines. Shares of Seattle-based Alaska Air were down 17.6%.