Originally Posted by
beancounter
Then why do you think it was that Alaska was never bought out? Just looking at market cap there were several years where Alaska’s cash in hand practically could have paid for company.
I experienced the acquisition premium firsthand when a company I had private shares in was acquired by much larger company. It was roughly 3x book value.
That's a good question, and I think the answer is complicated.
I think AS has some ties with Boeing. It is opaque to us peons what the exact nature of that it is, but I think other airline managers have a better idea.
There are corporate raiders who buy up unbalanced companies just to liquidate and sell off the parts. But that's not something you can do with any large airline in this era... too big to fail is also too big to get severely disrupted. So while AS might have a pile of cash, that's not really going to be of any value to raiders... they would need the cash to operate the airline, which is something they don't know how to do and don't want to do.
Airlines are quasi-public utilities in this era... you can own it but there limits as to what you can do with it.
When another airline buys an airline, it always seems to be pre-coordinated with large investors and BoD. You're not likely to be buying retail shares on the open market, you just get some larger investors to sell enough large blocks to shift control. That will normally still be at a premium, but it's negotiated in advance, not a bidding frenzy on the NYSE.
Trying to do an uncoordinated hostile takeover doesn't seem to be common with airlines in this era.