Virgin Australia Offers $98.7M on Skywest

Following Virgin Australia’s purchase of a 60-percent stake in Tiger Airways for $35 million, Virgin has offered $98.7 million to takeover Skywest, a regional airline carrier.

The move also follows the news that Singapore Airlines purchased a 10-percent stake in Virgin Australia. Singapore Airlines shelled out about $105 million.

Virgin Australia said its $98.7 million amounts to 46.88 cents for every Skywest share.  Skywest operates in Southeast Asia and regional Australia.

According to Jeff Chatfield, Virgin Australia’s offer is subject to approvals of shareholders and regulatory bodies. He added that the offer provided a premium to Skywest’s share price. Chatfield is the executive chairman of Skywest.

The approvals must come from the Australian Foreign Investment Review Board, Securities Industry Council of Singapore, Australian Competition and Consumer Commission and Singapore’s High Court.

Chatfield also said that the proposal would only proceed if a more superior offer does not come in. The company is also appointing an independent expert to provide advice to the board on the merits of the proposal.

The executive chairman also said that the proposal is likely to take several months before it is fully played out. Shareholders of Skywest would also vote on the offer when the company calls for a general meeting.

Skywest Airlines has been operating for about 50 years to more than 16 destinations.