Hawaiian Holdings Inc.’s stock HA, +8.24% experienced a remarkable surge of 174% during premarket trade on Monday. This significant increase in value is a direct result of Alaska Air Group Inc. ALK, +5.08% announcing their plans to acquire the parent company of Hawaiian Airlines for a whopping $1.9 billion.
The Acquisition Deal
Under the terms of this acquisition deal, Alaska Air will pay $18 per share in cash. Additionally, they will assume approximately $900 million of Hawaiian’s net debt. This transaction will result in a total equity value of about $1 billion. It is important to note that the share price represents a premium of 270% above Hawaiian’s closing price from the previous Friday, which stood at $4.86.
Approval and Closing Details
The boards of directors of both Hawaiian Holdings Inc. and Alaska Air Group Inc. have given their approval for this acquisition. However, it is still subject to regulatory approval and the consent of Hawaiian’s shareholders. The completion of this deal is anticipated within the next 12-18 months.
Financial Performance
While this acquisition announcement has caused Hawaiian’s stock to skyrocket, Alaska’s stock experienced a decline of 11.6% during premarket trade. Additionally, Alaska’s stock has fallen by 5% over the course of the year leading up to Friday’s closing. On the other hand, the S&P 500 SPX, +0.59% has observed a significant gain of 19.7%.
This acquisition deal has the potential to transform the landscape of the airline industry as two major players come together. Only time will tell how this union will shape the future for both Hawaiian Airlines and Alaska Air Group Inc.