On and off over the years, Alaska Air Group, Inc. and Aloha Airlines have discussed combining forces. They operate the same type of aircraft. Their route systems are contiguous, but yet there is no overlap. Senior managers have even thought of a logo, "Aviation Pioneers in the 49th and 50th States." The CEOs of both companies have conferred. Both agree that the deal should continue to go forward. Alaska's CEO would be CEO of the new venture. The Aloha CEO would serve as Chief Operating Officer ("COO") of the new venture. Informally, the CEOs have both consulted with a majority of their respective directors, all of whom approve of the idea.
1. What form should the "deal" take? What "deal structure" would you recommend?
A. A statutory merger.
B. Alaska should buy Aloha shares in the open market.
C. Alaska should make an offer directly to Aloha shareholders to purchase their shares for cash (cash tender offer).
D. Alaska should make an offer directly to Aloha shareholders to exchange their shares for Alaska shares (stock tender offer or, perhaps, mandatory share exchange).