SkyWest Inc. and ExpressJet Holdings Inc. announced Wednesday that SkyWest will buy ExpressJet for $6.75 a share, or about $133 million. The official buyer is Atlantic Southeast Airlines Inc., a SkyWest subsidiary.
Could we have a program to tell the players, please?
Let’s trace the lineage of all this.
A. ExpressJet was originally Continental Express, Continental Airlines’ regional carrier. Continental combined a number of small regional airlines to create Continental Express, including Royale Airways of Houston, Pioneer Airlines of Denver, bought in 1953; and Mid Pacific Air .
Continental renamed its ExpressJet and decided to spin it off as a public company. In April 2002, ExpressJet had an initial public offering and sold 10 million shares of its stock, raising $160 million. Continental sold 20 million shares of ExpressJet stock for $300 million.
After the IPO, Continental retained 53.1 percent ownership in ExpressJet. It reduced that to 30.8 percent as of Dec. 31, 2004; and 8.6 percent as of Dec. 31, 2005.
Continental recorded a gain of $173 million in 2002 and $98 million in 2005 from disposing of ExpressJet stock. It also booked a $130 million contribution of ExpressJet stock to its pension fund.
B. Atlantic Southeast was an independent regional carrier that began flying in 1979 and had its IPO in 1982. In 1984, it became the first Delta Connection carrier for Delta Air Lines.
In 1986, Delta bought about a 20 percent share in ASA for about $38 million, which would value the entire airline at about $190 million.
In 1999, Delta purchased the rest of ASA for about $700 million.
Then in 2005, Delta sold ASA to SkyWest for $425 million.