A stock-for-stock merger, where a buyer pays with its own shares rather than cash, brought two budget carriers together in the second quarter of 2026. Allegiant Travel Company (NASDAQ: ALGT) was the acquiring company, and it paid for Sun Country Airlines (SNCY) predominantly in ALGT stock. Colorado-based hedge fund Legacy Ridge Capital Management held positions in both airlines before the deal closed and converted its entire stake into the merged company rather than selling.
What the deal says on paper
Allegiant Travel is now the sole operating entity. The share-based payment structure means former Sun Country shareholders received Allegiant stock, tying their returns directly to how well the integration goes. Legacy Ridge, in its mid-2026 investor letter, said it will greatly miss Sun Country CEO Jude Bricker running the airline but expressed confidence in Allegiant's management to execute the combination. The fund kept every share it held in both carriers and rolled them into the merged company.
Allegiant Travel shares closed at $105.09 on August 4, 2026, giving the company a market capitalization of $2.82 billion. The stock fell 2.93% over the prior month but gained 108.93% over the preceding 52 weeks.
Where Legacy Ridge stands and why it held
Legacy Ridge reported a net return of 15.7% for the first half of 2026. The fund described its volatility as subdued for a portfolio that includes cyclical businesses, a term for companies whose revenues track closely with the broader economy, with airlines a clear example. The firm identified the Iran War as a factor that shifted investor attention toward hard assets including airlines and energy infrastructure. Oil supply was disrupted, but oil prices did not rise as sharply as anticipated, which the fund flagged as part of the backdrop for its holdings.
Allegiant Travel ranked among Legacy Ridge's five largest positions heading into the year. Thirty hedge fund portfolios held the stock at the end of the first quarter of 2026, up from 24 in the preceding quarter.
The market these two carriers both served
Allegiant Travel describes its core business as connecting residents of underserved cities, meaning smaller markets that major carriers typically skip. Sun Country operated on similar logic. That shared focus is part of what Legacy Ridge said made the combination sensible, and it explains why the fund chose to stay invested rather than treat the merger as an exit.
No integration timeline was provided in the investor letter. The last confirmed stock price is $105.09, as of August 4, 2026.