Richard Branson 'sad' at £2.8bn sale of Virgin America
Billionaire says there was nothing he could do to stop Alaska Air buying out company
Sir Richard Branson says he is sad at the news that Virgin America, the budget airline he launched in the US market nine years ago, has been sold to rival Alaska Air.
The boards of the two companies have unanimously approved a $2.6bn (£1.8bn) buyout offer, which, when debt and airplane leases are taken into account, equates to a total value for the business of $4bn (£2.8bn).
Sir Richard owns around 30 per cent of the shares in the company. Having initially floated for $23 a share in 2014, valuing the business at $1.2bn, the $57-a-share buyout price means the billionaire's stake has more than doubled in value and the deal nets him proceeds of around £550m, reports The Guardian.
But in a blog post, the businessman admitted to "sadness that our wonderful airline is merging with another". Citing US Treasury rules that mean non-US owners can control a maximum of 25 per cent of the voting shares in listed companies, he said there was "sadly nothing [he] could do to stop" the deal.
Sir Richard's VX Holdings owns 18 per cent of the voting rights in Virgin America, with the remainder of his stake held in non-voting shares.
He added that consolidation in the airline industry, which he has previously cited as bringing a focus on profits at the expense of passenger experience, "cannot be stopped".
He also claimed Virgin America was responsible for driving up standards, including introducing fleet-wide wifi internet connectivity and pushing down prices.
In a statement, Alaska Air said the deal would give it a "bigger business in California by expanding into San Francisco and Los Angeles", strengthening its ability to compete against larger US airlines, says the Guardian.
It added that the airline is currently valued at about $10bn (£7bn) and "flies from more than 100 cities in the US, Canada, Costa Rica and Mexico".