UsAir ups bid for Delta

[AMANSWORLD]

US Airways Group (LCC, news, msgs) has sweetened its offer for bankrupt Delta Air Lines (DALRQ, news, msgs), increasing the bid to $10.2 billion from $8 billion.
US Airways is now offering Delta's unsecured creditors $5 billion in cash and 89.5 million shares of US Airways stock.
Shares in US Airways were up 2.5% to $59.38, and shares in Delta jumped 7.7% to $1.40.
CEO Doug Parker said by extending this offer, US Airways is "making it much, much easier" for Delta creditors to accept it. Parker said that though US Airways' original deal "offered substantially more value to Delta's unsecured creditors than the Delta stand-alone plan, we are making this revised offer to eliminate any doubt that a merger with US Airways offers Delta's unsecured creditors significantly more value."

• Video: US Airways raises bid for Delta: The latest from CEO Doug Parker

Although the two companies are using different valuation methods, US Airways said that according to Delta's valuation methodology, the proposal would deliver between $12.7 billion and $15.4 billion in value to Delta's unsecured creditors, a big premium to the $9.4 billion to $12 billion Delta places on its own stand-alone recovery plans.
US Airways added that a deal would add to its earnings per share in the first full year after completion.
The offer is set to expire on Feb. 1. Parker said Delta creditors don't have to definitively pick one offer or the other, but only to take some affirmative steps to allow US Airways to move forward.
Delta's board rejected US Airways' original offer, saying the airline is better off as an independent carrier.

 

[jegermeister]

An extra 2 billion? Where's Doug coming up with all this dough? Two years ago these guys were on death's door. Now they're strong arming a merger? The folks at USAir gave a lot back to the company, but I can't believe it's enough to finance this.

 

[AMANSWORLD]

Someone in thier finance department feels it is adventagous obviously. Delta may be in a very hard place at this point. UsAir , it seems to me wants gates and routes from DAL, all else is completely worthless.
You would have to ask yourself if DAL was to offer you a job would one take it?
I have said since 9/11 someone has to merge or go out of buisness to bring back some healthy competition and balance market share a little better. Funny thing is I always thought it would be Northwest or UsAirways, not Delta. My how things change.

 

[grog_sit_reserv]

If Delta offers a job, take it.

 

[FDJ2]

An extra 2 billion?

He's borrowing it. If Dougies "new Delta" were to happen the new airline would have over $22B in debt. How long do you give before the new entity goes into Ch 11 with a debt load like that?

 

[AMANSWORLD]

He's borrowing it. If Dougies "new Delta" were to happen the new airline would have over $22B in debt. How long do you give before the new entity goes into Ch 11 with a debt load like that?

Agreed, then mass consolidation and partial liquidation, if not complete liquidation. Bye,bye DAL at that point no matter what.

Not trying to be a jerk but that is the reality of mergers. Just ask Western,TWA, and Eastern employees -ALL Employees...

 

[Tarzan]

An extra 2 billion? Where's Doug coming up with all this dough? Two years ago these guys were on death's door. Now they're strong arming a merger? The folks at USAir gave a lot back to the company, but I can't believe it's enough to finance this.

Citi is in with US Air along with Morgan Stanley as the most recent to jump on board. Probably were the extra cash is coming from.

http://us.rd.yahoo.com/finance/exte...tfh94988_2007-01-08_20-40-41_n08364063_newsml

 

[mamba20]

He wont be satified till he runs 3 airlines into the ground.

 

[flyer172r]

He's borrowing it. If Dougies "new Delta" were to happen the new airline would have over $22B in debt. How long do you give before the new entity goes into Ch 11 with a debt load like that?

As the saying goes: if you owe the bank 100 dollars, you're in trouble. If you owe the bank 1,000 dollars, they're in trouble.

 

[johnsonrod]

He wont be satified till he runs 3 airlines into the ground.

That is VERY true....

 

[flyboyike]

It seems to me Mr. Parker realizes that time is not on his side, hence the higher offer. Overall, this looks like a case of pretty poor timing. I don't think the newly powerful Democrats would be too keen on giving that much power to any one company. His chances probably would have been much better a year ago.

 

[Swaayze]

AA has over $20B in debt and they seem to be doing ok. Not saying it's smart to carry that much but if you can service it and get rid of your main competitor in the East then why not?

 

[General Lee]

DL has been negotiating with NWA on the side. They would agree to that merger before a USAir takeover, and that is a fact. I am sure NWA could find the same amount of money (they already have a boutique bank working on the financing right now), will get through the DOJ scrutiny better, and actually be accepted by both sides. The creditors will see the money, see the long term value, and Congressmen won't have to get involved, which will happen (hearings were just called for by the Senate and the House). The USAir/DL merge is very, very unlikely, just on the anti-trust matters alone. And, NWA does not want an AA merge if that is what is left after UAL/CAL merge, since one of their midwest hubs would go bye bye (MSP, ORD, and DTW are too close to all be large hubs). Nope.


Bye Bye--General Lee

 

[General Lee]

AA has over $20B in debt and they seem to be doing ok. Not saying it's smart to carry that much but if you can service it and get rid of your main competitor in the East then why not?

Get rid of your main competitor in the East? I guess you will be the first witness at the DOJ hearings..... Great. Doug Parker will smack you hard now! And some people think the Gov't wont see that same point? Riiight.


Bye Bye--General Lee

 

[General Lee]

Agreed, then mass consolidation and partial liquidation, if not complete liquidation. Bye,bye DAL at that point no matter what.

Not trying to be a jerk but that is the reality of mergers. Just ask Western,TWA, and Eastern employees -ALL Employees...

The Western merger was wanted by both sides, and actually produced a good combination, kinda like AWA and USAir. That isn't the case with US and DL, since there is too much overlap. The Gov't will shoot it down, if it gets that far. Sen Dorgan already has called a hearing and Parker will probably have to testify, and tell the Senate panel how this would help consumers. He also stated he didn't think it was time for a marriage of large carriers. Nope.

Bye Bye--General Lee

 

[General Lee]

Someone in thier finance department feels it is adventagous obviously. Delta may be in a very hard place at this point. UsAir , it seems to me wants gates and routes from DAL, all else is completely worthless.
You would have to ask yourself if DAL was to offer you a job would one take it?
I have said since 9/11 someone has to merge or go out of buisness to bring back some healthy competition and balance market share a little better. Funny thing is I always thought it would be Northwest or UsAirways, not Delta. My how things change.

You sound worthless. And let me guess, you were turned down by Delta? Or are you an RJDC member? DL will merge with NWA before they ever merge with US. Sorry. You can try again for an interview later, for Compass.


Bye Bye--General Lee

 

[General Lee]

Agreed, then mass consolidation and partial liquidation, if not complete liquidation. Bye,bye DAL at that point no matter what.

Not trying to be a jerk but that is the reality of mergers. Just ask Western,TWA, and Eastern employees -ALL Employees...

Delta Air Lines is once again up for grabs.

US Airways chief executive officer Doug Parker fired a second blast Wednesday by upping his $8.5 billion offer by 20%, offering Delta creditors $10.2 billion in cash and stock.

But at market close on Wednesday, Northwest and United (nasdaq: UAUA - news - people ) emerged as possible buyers for the bankrupt airline.

Both Northwest and United Airlines have both been in talks with Delta, reports Calyon analyst Ray Neidl who put out a note on the development late Wednesday. “These meetings have helped Delta’s creditors come to see a combination with Northwest as a realistic alternative to US Airways Group’s hostile takeover bid,” wrote the analyst.


And from another article:


Delta, according to people involved in the talks, is hoping
to fend off US Airways, and has been in talks with Northwest
for weeks. Both carriers are operating in bankruptcy, with
plans to emerge later this year.

A Northwest bid would probably be preferable to Delta
managers because the two airlines’ route networks overlap
less than with Delta and US Airways. A combination with
Northwest is therefore likely to lead to fewer grounded
planes, if any.


Bye Bye--General Lee

 

[Swaayze]

Get rid of your main competitor in the East? I guess you will be the first witness at the DOJ hearings..... Great. Doug Parker will smack you hard now! And some people think the Gov't wont see that same point? Riiight.


Bye Bye--General Lee

Does anyone really not see this aspect of it? I don't think so. However, don't confuse getting rid of a main competitor with completely getting rid of adequate opportunity for competition. JB, AT, AA, CAL all compete w/ LCC and/or DAL pretty significantly in the East.

 

[General Lee]

Does anyone really not see this aspect of it? I don't think so. However, don't confuse getting rid of a main competitor with completely getting rid of adequate opportunity for competition. JB, AT, AA, CAL all compete w/ LCC and/or DAL pretty significantly in the East.

Not really. USAir and DL are the big players on the East Coast. They both have very large hubs with significant feed (something JB and AT do not have). CAL has one large hub at EWR. US and DL have larger presences at BOS, the NYC area, PHL, CLT, ATL, and the Shuttles. Throw PIT and CVG in there too if you want. The Gov't usually doesn't want less choice for consumers, and JB and AT would not fill in all of the gaps.


Bye Bye--General Lee