HA - Here's Why Hawaiian Stock Is Soaring and Alaska Air Is Falling After the 2 Airlines Announced a Merger
2023-12-04 13:57:57 ET
Alaska Air Group (NYSE: ALK) has a deal to acquire the parent of Hawaiian Airlines for $1.9 billion in cash and assumed debt.
The deal is sending shares of the two companies in opposite directions, with Hawaiian Holdings (NASDAQ: HA) up 187% as of 12:30 p.m. Eastern and shares of Alaska down 15.7% in the same time frame. Investors often get nervous about acquisitions made at a high premium, but this is a deal that makes sense for both airlines.
Alaska is offering $18 per share in cash for Hawaiian, a premium of 270% to the target's $4.86 Friday closing price. But even with that premium, Alaska would pay just 0.7 times revenue, including debt to be assumed.
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Here's Why Hawaiian Stock Is Soaring and Alaska Air Is Falling After the 2 Airlines Announced a Merger