Letter Urges Stockholders To Reject Mesa Takeover Bid

It's the latest shot fired in a takeover battle that's becoming more and more shrill. Atlantic Coast Airlines has sent a letter to stockholders regarding connection with Mesa Air Group consent solicitation.

Mesa announced back in October it wants to take over ACA and boot the entire board of directors.

Now, ACA is writing stockholders, asking for their support in fighting off the hostile takeover bid.

The letter says, in part, "We are writing to you because Mesa Air Group has announced its intent to solicit your consent to remove the current members of the Board of Directors of Atlantic Coast Airlines Holdings and to replace them with a slate of directors hand-picked by Mesa. Your Board believes that Mesa is attempting to take control of your company in order to advance Mesa's interests -- with no regard for the serious harm its actions could cause for ACA and its stockholders."

ACA boasts that its Dulles International (VA) gates will allow it to launch its new low-cost airline, Independence Air, suggesting that's what Mesa is really after. ACA has ordered 25 new Airbus A320 aircraft in anticipation of next year's launch.

The letter continues: "Although Mesa attempts to portray itself as a concerned ACA stockholder whose interests are aligned with yours, we believe that the MOU gives rise to a significant conflict of interest for Mesa that you should keep in mind when considering Mesa's proposals. Specifically, we believe that Mesa stands to gain far more in direct benefits from the deal that it has negotiated for itself with United than it does from its holdings in ACA."

FMI: www.atlanticcoast.com