VIRGIN Australia has made a $98.7 million takeover offer for regional carrier Skywest.
The news came among a slew of announcements by Virgin on Tuesday, including that it had bought a 60 per cent stake in low cost carrier Tiger Airways Australia for $35 million.
Singapore Airlines also announced it had bought a 10 per cent stake in Virgin Australia for $105 million.
Virgin said its cash and scrip offer for Skywest, which operates in regional Australia and south east Asia, was worth 46.88 cents per Skywest share.
The offer is made up of 22.5 cents in cash and 0.53 shares in Virgin Australia in exchange for each Skywest share.
Skywest executive chairman Jeff Chatfield said the offer, which is subject to regulatory and shareholder approvals, represented a substantial premium to the airline's share price.
"The proposal will only proceed in the absence of a superior offer," he said in a statement.
"Skywest will be appointing a Singaporean independent expert to advise the board on the value of the proposed consideration.
"Based on our advice it is likely that this proposal will take some months to fully play out."
The deal is subject to approvals from the Australian Competition and Consumer Commission, the Australian Foreign Investment Review Board, Singapore's High Court, and the Securities Industry Council of Singapore.
Skywest shareholders will also be asked to vote on the offer at an extraordinary general meeting.
Skywest shares closed at 28 cents on Monday, while Virgin ended at 46 cents.
30th October 2012, 09:21 AM
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