Branson to pocket US$500m in Virgin America sell-off
Sir Richard Branson is set for a near-US$500-million (N$7.4 billion) payday as his US airline Virgin America edges towards a sale.
Alaska Air is said to be closing in on a deal worth more than US$2 billion (N$29.4 billion) for the California-based airline, which was spun out of Branson's Virgin Group and floated on Nasdaq in 2014.
Reports suggest that Alaska Air is set to shell out as much as US$58 (N$852.60) per share for Virgin America with a deal due to be announced as early as today.
The takeover would value Virgin America at more than twice what it was worth when it went public at US$23 (N$338.10) per share.
The shares closed last week at US$38.90 (N$571.83), valuing the company at US$1.5 billion (N$22.1 billion).
The share price has risen in recent weeks as news emerged that the airline was sounding out potential buyers.
Seattle-based Alaska Air appears to have beaten rival suitor JetBlue Airways, which would be overtaken as the fifth-largest airline in the US by traffic by the enlarged group if the deal goes ahead.
Sir Richard retains around 22% of Virgin America through his offshore investment vehicle VX Holdings, which would make a US$2 billion (N$29.4 billion) sale worth up to US$480 million (N$7.1 billion) to the businessman.
As a British citizen, Sir Richard, whose Virgin empire spans trains and space travel, is restricted to owning less than 25% of the company under foreign ownership rules in the US.
Virgin America's launch was delayed in 2006 when the Department of Transportation prevented the airline from starting up after intense lobbying from US rivals about its foreign ownership.
Virgin America's first flight was in 2007, but its first profit came in 2013 as the airline started to slow its heavy investment and began charging more for seats on its planes.
Last year Virgin America racked up US$1.5 billion (N$22.1 billion) in revenues, a 2.7% increase on 2014, while profits surged to US$340 million (N$5 billion).
There has been a wave of consolidation among US airlines.
The last deal was in 2013 when American Airlines and US Airways merged.
THE INDEPENDENT
Alaska Air is said to be closing in on a deal worth more than US$2 billion (N$29.4 billion) for the California-based airline, which was spun out of Branson's Virgin Group and floated on Nasdaq in 2014.
Reports suggest that Alaska Air is set to shell out as much as US$58 (N$852.60) per share for Virgin America with a deal due to be announced as early as today.
The takeover would value Virgin America at more than twice what it was worth when it went public at US$23 (N$338.10) per share.
The shares closed last week at US$38.90 (N$571.83), valuing the company at US$1.5 billion (N$22.1 billion).
The share price has risen in recent weeks as news emerged that the airline was sounding out potential buyers.
Seattle-based Alaska Air appears to have beaten rival suitor JetBlue Airways, which would be overtaken as the fifth-largest airline in the US by traffic by the enlarged group if the deal goes ahead.
Sir Richard retains around 22% of Virgin America through his offshore investment vehicle VX Holdings, which would make a US$2 billion (N$29.4 billion) sale worth up to US$480 million (N$7.1 billion) to the businessman.
As a British citizen, Sir Richard, whose Virgin empire spans trains and space travel, is restricted to owning less than 25% of the company under foreign ownership rules in the US.
Virgin America's launch was delayed in 2006 when the Department of Transportation prevented the airline from starting up after intense lobbying from US rivals about its foreign ownership.
Virgin America's first flight was in 2007, but its first profit came in 2013 as the airline started to slow its heavy investment and began charging more for seats on its planes.
Last year Virgin America racked up US$1.5 billion (N$22.1 billion) in revenues, a 2.7% increase on 2014, while profits surged to US$340 million (N$5 billion).
There has been a wave of consolidation among US airlines.
The last deal was in 2013 when American Airlines and US Airways merged.
THE INDEPENDENT
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