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In a definitive agreement announced last week, Western Pacific Airlines Inc. proposed to acquire Frontier in a stock swap valued at about $36.5 million -- combining two low-fare Colorado-based carriers. As part of the proposed deal, Western Pacific will exchange 0.75 of a common share for each Frontier share, which will be subject to change under certain circumstances. Under this agreement, Frontier shareholders will own about 31 percent of the combined company. The acquisition will give Frontier stockholders 31 percent ownership of Western Pacific. Frontier, created in 1993 by several executives from the original Frontier Airlines, has a fleet of four Boeing 737-300s and seven 737-200s. Western Pacific has a fleet of 18 Boeing 737-300s and flies to 27 destinations -- including New York, Chicago, Washington, Denver, Dallas, Los Angeles and San Francisco -- in combination with its commuter affiliate, Mountain Air Express. By the end of this year, the carriers plan to raise the number of Boeing 737 aircraft they operate from 30 to 34. After the acquisition, three Frontier directors will join Western's board, expanding it to nine members. Although the carriers have not decided on new name, they do plan to begin an interim code sharing arrangement on August 1 whereby their combined schedule will be displayed under both codes. The companies expect to complete the transaction sometime in October, subject to approval by shareholders as well as various other conditions. |
