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D.C. Antitrust Office Probes Mesa Air Bi

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dashtrasher

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Reuters
D.C. Antitrust Office Probes Mesa Air Bid
Tuesday December 9, 1:11 pm ET


NEW YORK (Reuters) - District of Columbia antitrust officials have opened their own probe into Mesa Air Group Inc.'s (NasdaqNM:MESA - News) unsolicited $473 million takeover offer for rival Atlantic Coast Airlines Inc. (NasdaqNM:ACAI - News), according to court documents obtained on Tuesday.
The investigation, which is in its early stages, was launched after Dulles, Virginia-based regional airline Atlantic Coast claimed two weeks ago that the takeover offer violated federal and District antitrust laws by conspiring to put it out of business, according to a filing from the Corporation Counsel, Washington D.C.'s antitrust office, on Monday.

In the filing, the Corporation Counsel requested the U.S. District Court support Atlantic Coast's request for a preliminary injunction that would prevent Mesa Air, based in Phoenix, from moving ahead with its offer. A hearing on that injunction request is scheduled for today.

"The District has an interest in protecting its economy and its citizens from any restraints of trade that would raise prices and reduce choice," the Corporation Counsel said in its filing. "In addition, the District government itself has a proprietary interest, as a purchaser of air travel, in opposing any anti-competitive conduct pertaining to air travel into and out of the D.C. area, including air travel to and from Dulles airport."

The Virginia Attorney General's office also filed a brief supporting the Corporation Counsel's motion for a preliminary injunction, court documents showed.

Mesa Air was not immediately available to comment.

The probe adds yet another chapter to an acrimonious takeover battle initiated when Mesa publicly offered to buy out Atlantic Coast in October.

Mesa is currently awaiting U.S. Securities and Exchange Commission (News - Websites) approval to launch a consent solicitation that seeks Atlantic Coast shareholder approval to force an election on seven directors nominated by Mesa to the company's board.

Mesa is expected to follow the consent solicitation with a hostile tender officer to acquire each of Atlantic Coast's outstanding shares for 0.9 shares of Mesa stock.

Atlantic Coast amended its lawsuit against Mesa two weeks ago to include UAL Corp. (OTC BB:UALAQ.OB - News), parent company of United Airlines, which it believes is supporting Mesa's takeover offer. UAL and Mesa recently agreed on terms to run a jet service if the takeover bid is successful.

Mesa shares fell 15 cents, or 1.3 percent, to $11.59 in late morning trading while Atlantic Coast shares slipped 22 cents, or 2.1 percent, to $10.12.
 

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