AirNet May Deliver Quite a Packet

By stepping down as chairman, has Gerald Mercer put AirNet Systems (ANS ) in play? He founded the company in 1974 but, because of poor health, retired on July 27--and sold back to the company 818,300 shares at $6.11 each, for a total of $5 million. Mercer still owns 2.3 million shares, or 21.2% of the company. So he still has a good deal of say in the future of AirNet, a Big Board-listed provider of overnight delivery service to more than 100 banks, mainly the transport of time-critical canceled checks. AirNet's big rivals in the business are FedEx and United Parcel Service.

Some pros contend that Mercer and some of the other big stakeholders want to sell the company--and are pushing for the company to hire an investment bank to explore all strategic options. Some investors figure that AirNet is worth 11 to 15 a share, based on 5 to 7 times projected 2001 cash flow of $25 million, or $2.27 a share.

AirNet's stock has been strong this year, winging up from 4 in February to 7.30 on Aug. 1. "With the founder retired but still in control of over 20% of the stock, AirNet has become a likely takeover target," says Sven Monberg of Starr Securities. AirNet now needs to merge or be acquired by a larger company as it tries to diversify into other sectors of the highly competitive freight-forwarding express business. A spokeswoman for AirNet says she isn't aware of plans to hire an investment bank.

By Gene G. Marcial

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