ExpressJet spurns SkyWest bid

ExpressJet Holdings Inc., a U.S. commuter airline that also flies under its own brand, has rejected a takeover bid from SkyWest Inc. and says it may negotiate with other carriers.

The $3.50-a-share cash offer "represents an opportunistic attempt by SkyWest to acquire the company at a price well below the true value that ExpressJet would bring to a combination," Houston-based ExpressJet said this past week in a regulatory filing.

A purchase by SkyWest or another airline might help end losses since ExpressJet started flying under its own name a year ago. Surging fuel prices are adding to pressure for mergers, led by Delta Air Lines Inc.'s plan to buy Northwest Airlines Corp.

"The deal would make a lot of sense, combining two regional operators that we view as well run," Standard & Poor's analyst Jim Corridore in New York said in a research note regarding a SkyWest tie-up.

SkyWest said it was "disappointed" ExpressJet rejected a bid that provides "full and fair value" to shareholders. The offer may be withdrawn or altered, SkyWest said in a news release, adding that it is reviewing all alternatives.

ExpressJet didn't specify what other partners it would consider, beyond saying that a special board committee would study "strategic and operational alternatives."

The review will include talks with SkyWest "and other potentially interested parties to evaluate a merger at a higher price," ExpressJet said. The airline said it also is considering a new capacity purchase agreement with Continental Airlines Inc.

SkyWest operates commuter flights for Delta and UAL Corp.'s United Airlines. ExpressJet, operating 50-seat regional jets, flies mainly for Continental and Delta as well as using its own name.