Airbourne shareholders sitting pretty
If the DHL acquisition of Airborne’s ground operations clears regulatory and shareholder approval, the only thing left to form the new ABX Air Inc. company will be Airborne’s air line haul and perhaps some trucking operations that feed it.
Everything other than the air line haul would become part of DHL, according to a footnote in the press releasing announcing the acquisition. The footnote defines ground operations “as all non-airline related activities of the company.”
What is the airline worth? Some analysts say the airline is valued at about $1 to $3/share. That could change as more information about the new air business becomes available. Still, for Airborne shareholders this deal looks good. They get cash of $21.25/share for each Airborne share they hold, plus one share of ABX Air. Even if ABX Air eventually folds or is bought be another carrier, it’s at minimal risk to the current shareholders.
What’s the downside for Airborne shareholders? That would be if government regulators block the deal. Airborne stock was trading at $14 share before announcement of acquisition by DHL. The stock is now at $19.60. If regulators block the acquisition, that’s your downside, analysts say.
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