Alaska Air Tops Delta’s Bid for Jet America Stock

Alaska Air Group has escalated the bidding war for Long Beach-based Jet America Airlines, raising its tender offer to $4.50 per share, thus topping by 25 cents a share a competing bid from Delta Air Lines.

The Seattle-based parent of Alaska Airlines said its new $19.9-million offer is for all of Jet America’s 4.4 million shares outstanding. Alaska Air already owns 18% of Jet America stock and has options that, if exercised, would raise the stake to 29%.

Delta spokesman William E. Jackson said the Atlanta-based carrier is “studying” its alternatives, and he would not say whether it will raise its $4.25-per-share, $18.7-million tender offer. Delta’s offer expires Sept. 15, while Alaska Air said its new offer expires Sept. 18.

Jet America spokeswoman Peggy Cunningham said the carrier had no immediate comment on the new bid and remains neutral in the fray. The Long Beach airline had endorsed Alaska Air’s original Aug. 6 bid of $3.25 per share, or $14 million, but withdrew its endorsement following Delta’s Aug. 18 bid of $4.25 per share.

Analysts say Delta wants Jet America in order to expand its operations in the West and to obtain Jet America’s valuable landing rights at capacity controlled airports in Long Beach and Orange County.

Alaska Air has said it wants Jet America because it wants to enlarge its presence in Southern California and also to acquire Jet America’s aircraft as well as its landing rights in Long Beach and Orange County. However, Alaska Air said it would operate Jet America as a separate subsidiary under its current management.

Jet America, a 5-year-old carrier that has said it needs more funds to expand, provides service using six McDonnell Douglas MD-80 jets to Long Beach, Burbank, Orange County, Oakland, Chicago, Dallas/Fort Worth, Detroit, St. Louis, Las Vegas and Washington. The airline lost $2.4 million in the second quarter on operating revenue of $23.8 million.