US Airways raises the offer to 10.2 Billion

[TWA Dude]

I predict that this higher offer will completely convert General Lee into the biggest supporter there is.

Know where Dougie got the extra money from? Every USAirways employee pitched in. You've heard of employees helping paying for a new airplane; this time we're helping buy a new company! Delta guys can pitch in as well.

(nyuk, nyuk, nyuk)

 

[FlyBoeingJets]

You are especially correct with your last statement. Of course this also proves that DP was just cynically lowballing the creditors trying to buy DAL on the cheap. And most cynically, even he has admitted that the entire plan only makes sense if DAL's BK is extended.

Now that is one great business plan--extend your takeover target's time in BK or the deal makes no financial sense. Gee why would DAL employees not jump for joy over this prospect?

Why do you think the creditors, financiers and buyer should care whether or not the DAL employees think this is a great deal for them???

UAL seems to be doing just fine running roughshod over their employees. And at AA, wow, they really enjoy their management's antics. Despite what we know about integration issues at USAir, they are making money and have little risk of going Ch 7. Which was THE fear for them for years now.

If the pilots at DAL have contract provisions that will enable them to torpedo this deal, Parker doesn't seem to worry about them. I wonder why. Is he thinking the BK judge will negate the contract after a merger??

 

[General Lee]

Read it and weep General

This is all over but the shouting
http://biz.yahoo.com/prnews/070110/law023.html?.v=84

Wow, I should read it and weep? Huh? The Government came in yesterday and stated there would be hearings, and both the Senate and House don't seem very interested in this deal at all. They will strike it down, even if the creditors somehow said yes to this new deal (5 of the 9 on the committee are friendlies). I still can't wait to see Parker testify in front of the Senate and the House panels. Say it with a straight face Doug--"We will lower fares, and this is good for the consumer.....taking one of two airlines out of many cities in the Southeast...." Riiiight. It is all over but the shouting (was that the case with US and UAL?).


Bye Bye--General Lee

 

[General Lee]

Why do you think the creditors, financiers and buyer should care whether or not the DAL employees think this is a great deal for them???

UAL seems to be doing just fine running roughshod over their employees. And at AA, wow, they really enjoy their management's antics. Despite what we know about integration issues at USAir, they are making money and have little risk of going Ch 7. Which was THE fear for them for years now.

If the pilots at DAL have contract provisions to torpedo this deal, Parker doesn't seem to worry about them. I wonder why. Is he thinking the BK judge will negate the contract after a merger??

The BK judge already approved the DL pilots' contract. Nope. Doug is simply trying to talk to the creditors, and he hasn't obviously talked to the BK judge or anyone else who knows what is going on.


Bye Bye--General Lee

 

[johnsonrod]

So, Doug's original offer was just a low ball offer? I thought he said the first offer was fairly valued? This is getting ridiculous... Why not add another $10 billion to the pot?

In the end, I don't see this merger happening for a number of reasons:

1. DOJ will not allow it fearing the merger will give a green light to additional mergers (UAL + CAL and AA + NWA) and thus vastly reducing competition for consumers (note Dorgan's and Oberstar's comments from yesterday). You can't agree to one merger and then not allow others... The route maps for Delta and USAirways almost completely overlap in the US too - it is very obvious.

2. The politicians from Georgia, Utah and Ohio (where they have massive Delta constituents) will never allow it given potential layoffs

3. A hostile takeover in a service business is never a good thing and it sounds like Delta's employees are "united" against a hostile takeover when a standalone and eventually profitable Delta is very possible

4. Everyone will see that Doug can't even handle his own AWA/US integration - what a mess!

5. I doubt that DALPA, Boeing and others will go through with it given their own interests in Delta going forward.

Sure, money talks. But, in the end, the DOJ can override that.

 

[FlyBoeingJets]

The BK judge already approved the DL pilots' contract. Nope.


Bye Bye--General Lee

I wouldn't say "Nope" until after you exit BK.

 

[EdTeachLives!]

DP raises the offer 20%? I thought DL's valuation was "suspect". Appears perhaps it it was not and DP was trying to get DL on the cheap side.

So, this extra 20% is in cash, right? Nope. It's all added debt. Wonderful idea! Now the combined entity will have over 22 Billion in debt! DL's stand alone plan has it emerging with 8 billion in debt which is excellent compared to its 20+ billion it had prior to BK.

So if this is consumated, you have an extremely over leveraged airline with reactionary mergers that follow. Immediately you have a third tier air carrier with no Pacific rim exposure that will have to divest itself of critical east coast landing slots, gates and routes. The resulting reactionary mergers will produce stronger airlines with superior networks, and, they scoop up the divested assets as well. Excellent plan. Brilliant!

This increase appears to be a last ditch attempt to save face for Parker as it now has a drop dead date on the deal. Great way for him to say the deal died on his terms rather than face rejection on all other aspects of the proposal.

 

[PCL_128]

both the Senate and House don't seem very interested in this deal at all. They will strike it down, even if the creditors somehow said yes to this new deal

I tend to agree with you that this deal won't happen, but the Senate and the House aren't the ones that can strike it down. They can hold hearing and make recommendations, but the DOJ is the decision-maker.

 

[General Lee]

I wouldn't say "Nope" until after you exit BK.

Well, he did approve the DL pilots' contract, and that is why Parker even acknowledged that fact. Remember, Moak stated the USAir people initially thought they were "technicalities", which then went to "items unexpected." That is what I said "nope" to. As far as the takeover, I would say very unlikely---especially with the government now getting more involved. And, the creditor committee still will probably favor DL's plan, for the same reasons Phillip Baggely stated "less aquisition debt (now not $4 billion but $7 billion or more), DOJ scruitny, employee integration problems, etc..."


Bye Bye--General Lee

 

[General Lee]

I tend to agree with you that this deal won't happen, but the Senate and the House aren't the ones that can strike it down. They can hold hearing and make recommendations, but the DOJ is the decision-maker.

Oberstar tends to think he can lean on the DOJ:


Oberstar (chairman of the transportations sub committee) said that by publicly exposing the potential dangers of airline consolidation, his committee may be able to "throw cold water" on merger mania. "We can nudge the Justice Department to take the action they must" to prevent a loss in competition, he said.
Oberstar also said opposition to consolidation is bipartisan. "I’ve heard from members on both sides of the aisle" as worries have grown about the impact on jobs and service, he said. "I haven’t heard anyone come forward and say this is a really good deal."






Bye Bye--General Lee

 

[lookin4better]

IF ....and thats a big IF, this goes through....I bet we can count on merger frenzy.....I wont even guess who.....but others will follow in the consolidation....

 

[General Lee]

I tend to agree with you that this deal won't happen, but the Senate and the House aren't the ones that can strike it down. They can hold hearing and make recommendations, but the DOJ is the decision-maker.

Oberstar thinks he can LEAN on the DOJ to stop this:


Oberstar (chairman of the transportations sub committee) said that by publicly exposing the potential dangers of airline consolidation, his committee may be able to "throw cold water" on merger mania. "We can nudge the Justice Department to take the action they must" to prevent a loss in competition, he said.
Oberstar also said opposition to consolidation is bipartisan. "I’ve heard from members on both sides of the aisle" as worries have grown about the impact on jobs and service, he said. "I haven’t heard anyone come forward and say this is a really good deal."



Bye Bye--General Lee

 

[General Lee]

IF ....and thats a big IF, this goes through....I bet we can count on merger frenzy.....I wont even guess who.....but others will follow in the consolidation....

You're right. And that would leave US/DL as the small guy on the block. We would have hardly anything in Asia, and we would go up against CAL/UAL, and probably AA/NW (since the DOJ would approve US/DL--they would probably approve everyone else). Those two monsters would crush us. That is another supposed worry for some of our creditors. AA/NW and CAL/UAL would have complete route structures, and we would be lacking.


Bye Bye--General Lee

 

[spinproof]

The BK judge already approved the DL pilots' contract. Nope. Doug is simply trying to talk to the creditors, and he hasn't obviously talked to the BK judge or anyone else who knows what is going on.


Bye Bye--General Lee

Oh and you do!

Wow and you didn't mention Oberstar one time.....!!!! spoke too soon!!!...now klick your heels three times and sing..... When you wish on Oberstar makes no difference who you are, when you wish on Oberstar your dreams coooommmmmeeee taa-rue!

 

[General Lee]

Oh and you do!

Wow and you didn't mention Oberstar one time.....!!!! spoke too soon!!!...now klick your heels three times and sing..... When you wish on Oberstar makes no difference who you are, when you wish on Oberstar your dreams coooommmmmeeee taa-rue!

You can't debate, so you try to make fun, and instead look dumb.


Bye Bye--General Lee