Virgin America Interior
And of course that’s what Branson is saying publicly. Branson blogged,
I would be lying if I didn’t admit sadness that our wonderful airline is merging with another. Because I’m not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover. So there was sadly nothing I could do to stop it.
It’s true that Branson doesn’t personally have a veto over the deal. He doesn’t say he would have exercised one if he did.
And while there may be some amount of ‘sadness’ Branson is almost certainly very happy with the sale. Of course he has to publicly express sadness, or else he’d be aligning himself with Wu Tang Financial… and that’s not his image.
First, the price paid is almost absurd, a ~ 90% premium over what shares were trading at prior to merger speculation and a 46% premium over Friday’s close. He’s more than doubled the value of his investment from ~ $280 million to $560 million in two weeks. (He’ll almost certainly lose the 0.7% of revenue he takes off the top of Virgin America revenue as a licensing fee, however.)
Second because with Air New Zealand looking to unload its 26% stake in Virgin Australia this helps keep Branson in the running as a potential buyer (his company currently owns a 10% share) or at the very least helps credibly drive up the price if Singapore or Etihad are interested in increasing their stakes.
Virgin Australia Interior
Don’t shed a tear for Richard Branson even as he maintains a posture of ‘sadness’.