WPAC news:
Western Pacific-Frontier Match Up Official
First, an apology for those who read our updates online. Last week, I wrote a
blurb (before the proposed Westpac/Frontier merger was acknowledged on
Monday) about how WESTERN PACIFIC (Nasdaq:WPAC) had moved north and was
getting ready to begin flights out of its new home--DIA. Well, we have this
very responsible Foolish copyeditor who interpreted that as DETROIT
International Airport. Heh heh. Needless to say, the TMF Wings' mailbag was
quite full this week with notes from you folks who read our report online. It
was quite humorous. I mean, I said they moved NORTH--but no, not nearly that
far! Yes, it was DENVER--not Detroit!
But yes, on Monday it was officially announced that Western Pacific Airlines
and FRONTIER AIRLINES (Nasdaq: FRNT) will merge this fall.
Western Pacific Airlines says it has agreed to acquire Frontier Airlines Inc.
for stock valued at about $41.3 million.
Terms of the transaction call for Western Pacific to issue three-quarters of a share for each of Frontier's approximately 10 million shares outstanding, Th
e Wall Street Journal reported Tuesday. Based on WPAC's closing price of
$5.50 a share on Monday, Frontier would be valued at about $4.125 a share, a
6.5% premium over its closing price of $3.875 on Monday. The agreement was
announced after the close of regular trading hours.
Frontier shareholders will own about 31% of the combined company, and three Fr
ontier directors will sit on the nine-member board. The airlines said they
hope to have a code-sharing agreement in place by August 1, allowing
passengers to book flights on either airline, and expect to complete the
transaction by October. As with any transaction of this type, the
transaction is subject to regulatory and shareholder approval.
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