Mesa Air Stock Pares Gains After-Hours Following 55% Jump On Merger Deal With Republic Airways, Retail’s Extremely Bullish

Mesa Air (MESA) stock pared some gains in extended trading on Monday after jumping 54.9% during the regular session after it agreed to merge with Republic Airways Holdings in an all-stock deal.

The regional carriers said that after the deal closes, expected in the third or fourth quarter, Republic shareholders will own 88% of the combined company's common shares.

Mesa shareholders will own a minimum of 6% and up to 12% of the combined company, depending upon Mesa's achievement of specific pre-closing criteria. The companies did not reveal the transaction details.

The combined company will operate under the Republic Airways name and be listed on Nasdaq under a new ticker, "RJET".

Republic will continue to support American Airlines, Delta Air Lines, and United Airlines under its existing capacity purchase agreements with the carriers. Following the deal, Mesa will begin operating United flights under a new 10-year CPA.

The combined company is expected to produce revenue of about $1.9 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in excess of $320 million.

The combined company will maintain a single fleet of approximately 310 Embraer 170/175 aircraft, with over 1,250 daily departures.

Republic has about 240 Embraer 170/175 aircraft, and it carried approximately 17.5 million passengers in 2024.

Retail sentiment on Stocktwits about Mesa was in the ‘extremely bullish’ (85/100) territory but with a lower score than a day ago, while retail chatter was ‘extremely high.’

One bullish trader said that the stock was locked for a raise.

Another retail trader was not pleased with the equity share for Mesa shareholders in the combined company.

Mesa shares have fallen 9.8% year-to-date (YTD).

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