Doug is at it again, another $1 billion to DL offer

[General Lee]

He really is desperate. If the creditor committee even goes for this, Parker will have to go up against Oberstar on Feb 15th at the Transportation Committee review, and he already tanked at the Senate hearing..... Keep it up Doug. I thought Feb 1st was the deadline??? Desperation.



PHILADELPHIA, Jan 28 (Reuters) - US Airways Group Inc. (LCC.N: Quote, Profile , Research) may raise its hostile takeover offer for Delta Air Lines Inc. (DALRQ.PK: Quote, Profile , Research) by $1 billion under certain conditions to win support from Delta creditors, according to a report in the electronic edition of The Wall Street Journal.
Citing people familiar with the matter, the newspaper said US Airways would raise its offer to about $10.8 billion if the official committee of creditors demanded that Delta open itself to due diligence by US Airways.
The committee also would have to ask a bankruptcy judge to postpone a hearing next week on Delta's restructuring plan and agree to support the start of a formal antitrust review, according to the report.
US Airways and Delta could not be immediately reached for comment.




US Air Works to Save Delta Bid
As Offer Deadline Nears,
An Increase of $1 Billion
Aims to Sway Creditors
By COREY DADE, MELANIE TROTTMAN, and SUSAN CAREY
January 29, 2007

US Airways Group Inc. is willing to increase its hostile takeover offer for Delta Air Lines Inc. by $1 billion under certain conditions as part of a last-ditch effort to win support from Delta creditors, according to people familiar with the matter.

The Tempe, Ariz., carrier said over the weekend that it would sweeten its $9.8 billion cash-and-stock bid to about $10.8 billion if the official committee of creditors approaches Delta with a demand that the Atlanta airline open itself to due diligence by US Airways, these people said. To get the additional $1 billion, all in cash, the committee also would have to ask a bankruptcy judge to postpone a hearing next week on Delta's restructuring plan, these people said. The group also would have to agree to support the start of a formal antitrust review.

• The News: US Airways is willing to raise its hostile offer for Delta by $1 billion.

• The Conditions: The official creditors' committee must demand that Delta open itself to due diligence by US Airways. The committee also would have to ask a bankruptcy judge to postpone a hearing on Delta's restructuring plan.

• What's at Stake: The move is aimed at salvaging an acquisition attempt that so far has failed to win broad support from the creditors' committee.

The move by US Airways is aimed at salvaging an acquisition attempt that so far has failed to win broad support from the official committee of Delta creditors, which holds much of the power to decide the airline's fate. The offer from US Airways is set to expire Thursday, and Delta could begin soliciting votes from creditors for its stand-alone reorganization plan following the Feb. 7 court hearing. Gerald Grinstein, Delta's chief executive, has insisted that the airline would be best to emerge from bankruptcy-court protection on its own later this year.

US Airways indicated that the $10.8 billion bid was final, said one person familiar with the matter. This person said the airline didn't consider the increased bid official since it hadn't yet sought director approval.

A spokeswoman for US Airways confirmed that the airline's advisers have been in contact with advisers for the ad hoc committee of Delta creditors, but she declined to comment on any specifics. A Delta spokesman declined to comment.


It isn't known whether the additional $1 billion is swaying any of the Delta creditors on the official committee closer to supporting the US Airways takeover bid. Any sign that the committee is wavering in its endorsement of Delta's strategy to exit from bankruptcy protection on its own this spring would likely have to emerge in the next several days.

The sweetened offer came after US Airways was approached late Friday by a group of Delta creditors that aren't part of the official committee, said the people familiar with the matter. The outside group, consisting largely of short-term investors who are more interested in the US Airways takeover than the official committee, proposed that the bid be increased by more than $2 billion, these people said. The ad hoc group also indicated that some of its members would be willing to publicly state their support for the acquisition.

On Saturday, US Airways responded with its offer of an additional $1 billion in cash, bringing the total cash portion of the bid to about $6 billion, these people said. US Airways wouldn't increase the number of shares from the previous offer of 89.5 million, but it included a termination fee that would be paid to Delta creditors if the deal is blocked by the Justice Department for anticompetitive reasons.

Write to Corey Dade at [email protected], Melanie Trottman at [email protected] and Susan Carey at [email protected]






USAir talked to the Ad Hoc committee, not the official creditor committee.....Great...Add even more debt to the debt load....There goes Doug trying to mortgage his employees' future again....The problem with USAir is that half of the stock is owned by Hedge Funds, and they are in it for a quick buck. When they have had enough, they will sell, and the stock will really tank. Doug needs a solution, and he thinks he could have one with DL. Sad.


Bye Bye--General Lee

 

[737 Pylt]

But I thought parker said that DL over valued itself at $9-$12B and was only worth $8B?
He's pathetic, and desparate!:laugh: :laugh: :laugh:
[sarcasm on] But he did such a stand up job on capitol hill, he must be believable, especially the part about no front line employee furloughs! [/sarcasm off]

737

 

[GogglesPisano]

US Airways' Merger Hopes Dim
By Ted Reed
TheStreet.com Staff Reporter
1/29/2007 7:08 AM EST
Click here for more stories by Ted Reed






The proposed hostile takeover of Delta (DALRQ - Cramer's Take - Stockpickr) has won big on Wall Street, but it never gathered much backing on Main Street.
The effort by US Airways (LCC - Cramer's Take - Stockpickr - Rating) to take over its biggest competitor has won little support aside from the bankers working on the deal.

Delta's management, which opposed the buyout from the start, won the battle for public opinion. A key was 16 "Keep Delta My Delta" rallies it backed around the country, not only in big cities like Atlanta and Washington, but perhaps more importantly in places like Baton Rouge, La., Butte, Mont., Columbia, S.C., and Jackson, Miss.

A Senate Commerce Committee last week hearing on airline consolidation in general and the potential merger of Delta and US Airways in particular was a culmination of Delta's efforts.

The hearing was packed with uniformed Delta pilots. No one in attendance, outside of US Airways CEO Doug Parker and Andrew Steinberg, assistant secretary for the Transportation Department, voiced support for industry consolidation.

Sen. Trent Lott, R-Miss., told Parker: "I must say you are an aggressive suitor. But the lady from the South -- Atlanta -- doesn't seem to want to be forced into this shotgun wedding."

Another senator asked whether the money being spent on the merger could instead be spent on employee pensions.

A telling moment came when Sen. Claire McCaskill, D-Mo., related how many middle-aged flight attendants, most of them her constituents, lost their livelihoods because of the merger between TWA and American Airlines (AMR - Cramer's Take - Stockpickr - Rating).

"I have a great deal of angst over what has happened to the former TWA employees," McCaskill said.

Parker, who sought to explain dispassionately why American and its unions had acted as they did toward the TWA workers, seemed to be put into the position of defending what happened in that deal.
However, the congressional reception was a far cry from the Wall Street reception.

To pay for the deal, US Airways got $7.2 billion in debt financing from Citigroup. Then Morgan Stanley joined in. US Airways CFO Derek Kerr said the two firms "reinforce the financial community's confidence in the value creation of our proposed merger with Delta" and suggested a third firm might also take part.

After the merger announcement, Delta's bonds shot up. US Airways shares surged. Even Delta's shares, which are essentially worthless, climbed.

To be sure, the deal is not dead. The creditors could choose to go along, although recent reports suggest that is unlikely. The Justice Department can approve the proposal, even if Congress is opposed, although the Bush administration would have a lot of explaining to do. Now, a report in The Wall Street Journal is saying US Airways might lift its bid by $1 billion.

Considering Delta's past stance it's questionable as to whether that would matter. In a recent interview, Lee Moak, chairman of the Delta chapter of the Air Line Pilots Association, said the US Airways bid for Delta had triggered a battle between Wall Street and Congress.

"Wall Street types say it is simply a financial transaction and it is the American way," Moak said in an interview. "But in the Senate, what comes out of there is 'Are we going to let Wall Street set public policy on airlines?' "

It appears that question is close to being answered.

 

[WalterSobchak]

Ya know...I think Dougie just slid into the #7 spot on my list of "Management Type Folks That I'd Like To Punch In The Face".

Of course, I doubt anyone will ever dethrone JO for spots 1 thru 6.

 

[Flyer1015]

Another senator asked whether the money being spent on the merger could instead be spent on employee pensions.

"Fund pensions?" "Why would I wanna do that" wondered Douggie boy.

"I have a great deal of angst over what has happened to the former TWA employees," McCaskill said.

Parker, who sought to explain dispassionately why American and its unions had acted as they did toward the TWA workers, seemed to be put into the position of defending what happened in that deal.

"Screw those TWA employees, what matters is that the management got their golden parachutes, which is really what I want out of this whole deal" wondered Douggie boy.

 

[BILL LUMBERG]

Ya know...I think Dougie just slid into the #7 spot on my list of "Management Type Folks That I'd Like To Punch In The Face".

Of course, I doubt anyone will ever dethrone JO for spots 1 thru 6.

That's funny.......I don't care who ya are......That's funny!!!!!

 

[geardown]

I think Doug is just trying to force consolidation to eliminate some of his competition. At this point he probably knows he won't get Delta but if he can force others to jump into the fray then he still accomplishes his goal.

 

[Tejas-Jet]

Of course, I doubt anyone will ever dethrone JO for spots 1 thru 6.

frank lorenzo has to be in there someplace.

 

[Doug Parker]

.


This shizzle just ain't funny any more..............I just wish the AWA + AAA MECs would join with the Delta MEC in protesting this happy horseshxt from Dumbazz Dougie !!!



.

 

[Flyer1015]

DOUG_PARKER

OMG LMFAO!!!!!

Kudos for that username!

 

[FDJ2]

I think Doug is just trying to force consolidation to eliminate some of his competition. At this point he probably knows he won't get Delta but if he can force others to jump into the fray then he still accomplishes his goal.

If this deal is shot down, there won't be a merger between other legacy carriers. The tone on Wallstreet might be for mergers because of the short term gains they provide for investors, but like the article stated, Wallstreet does not set public policy.

 

[VeeOne]

You guys are missing a major point here- with every increase in purchase price Delta has to rush in to immediately increase their pay off to the creditors- effectively driving Delta's cost structure back up and nullifying the many benafits of their bankruptcy.

Regardless of wheather or not this thing goes through, USAirways and Parker end up ahead of the game......

I'm not a Parker fan here, or a USAirways guy, but look at it for what it is. Even though it won't go through, Delta is hurt either way.

 

[FDJ2]

I'm not a Parker fan here, or a USAirways guy, but look at it for what it is. Even though it won't go through, Delta is hurt either way.

I agree to some extent, however, as long as DAL exits BK with less than half the debt load it had going in, a significantly improved market exposure generating increased revenue and significantly reduced operational costs, in the long run the effect will be minimal.

 

[flatspin7]

For the love of God please just give it up!!! Parker GIVE IT UP!!!!

uke: imp:

 

[lionflyer]

frank lorenzo has to be in there someplace.

Hulas too.

 

[xanderman]

echo...

For the love of God please just give it up!!! Parker GIVE IT UP!!!!

uke: imp:

My thoughts exactly!!! This is just stupid now... I may get slammed for this by my fellow AWA/US pilots but... Sorry DL guys. It is not even fun to debate it anymore... Need for consolidation or not I am ashamed this guy (DP) is running my airline. We just had a horrible week at the negotiating table and yet he can come up with even more $. DP is an a$$. We (AWA/US) have a picket and picnic in Tempe on the 1st of FEB and again on the 6th in DCA. ALL ALPA pilots are welcome to attend. This is an opportunity to show support for your fellow ALPA pilots...


Andy

 

[General Lee]

My thoughts exactly!!! This is just stupid now... I may get slammed for this by my fellow AWA/US pilots but... Sorry DL guys. It is not even fun to debate it anymore... Need for consolidation or not I am ashamed this guy (DP) is running my airline. We just had a horrible week at the negotiating table and yet he can come up with even more $. DP is an a$$. We (AWA/US) have a picket and picnic in Tempe on the 1st of FEB and again on the 6th in DCA. ALL ALPA pilots are welcome to attend. This is an opportunity to show support for your fellow ALPA pilots...


Andy

Andy,

Well said. This is getting ridiculous.


Bye Bye--General Lee

 

[roadrunnerblue]

But I thought parker said that DL over valued itself at $9-$12B and was only worth $8B?
He's pathetic, and desparate!:laugh: :laugh: :laugh:
[sarcasm on] But he did such a stand up job on capitol hill, he must be believable, especially the part about no front line employee furloughs! [/sarcasm off]

737

Pathetic?

Everything about Delta's desparate attempt to get away from his bid and arrange a deal with NWA, although they deny it, coupled with their failing business plan is pathetic.

The Delta pukes are afraid that they will lose their double breasted suits...... now that is pathetic!

 

[General Lee]

Pathetic?

Everything about Delta's desparate attempt to get away from his bid and arrange a deal with NWA, although they deny it, coupled with their failing business plan is pathetic.

The Delta pukes are afraid that they will lose their double breasted suits...... now that is pathetic!

Huh? Some mergers are better than others. USAir and AWA had a good fit, with hubs not close to each other, and similar fleets. This is not the case with DL/US, and the Senate told that to Parker. Oberstar and the Transportation Committee may tell him the same on Feb 15th.

And failing business plan? We had a bad one, and since Leo and the gang left, the new one has done fairly well. Parker's plan is to become the largest airline (for one week, until the others merge and smash us), and then go back to BK court with $25 billion in debt. Great plan! At least a NWA/DL merger would have complementary route structures and a chance at succeeding.


Bye Bye--General Lee

 

[737 Pylt]

Pathetic?

Everything about Delta's desparate attempt to get away from his bid and arrange a deal with NWA, although they deny it, coupled with their failing business plan is pathetic.

The Delta pukes are afraid that they will lose their double breasted suits...... now that is pathetic!

What a dooshbag! I hate to be the bearer of bad news, but your company (B6)isn't exactly setting the world on fire. And the only other thing more pathetic is you trying to sound sensible!

737

 

[Marko Ramius]

Who besides pilots truly cares if this thing is pathetic or not? It's just politics and business for everyone else replete with sound bites. For the most part this is just another filler article ahead of the deadline and still no one knows for sure what the creditors are going to do which is where this thing has been for a while now. It's only interesting if that extra bil was part of negotiation between Parker and the committee to come up with terms they would agree too, but there is nothing to indicate that and it just as easily be Parker upping the offer to the max he has on his credit card.

 

[Morning Wood]

I thought Parker said he would give it until Feb 1 and then let it die? I guess not.

 

[Bavarian Chef]

Huh? Some mergers are better than others. USAir and AWA had a good fit, with hubs not close to each other, and similar fleets. This is not the case with DL/US, and the Senate told that to Parker. Oberstar and the Transportation Committee may tell him the same on Feb 15th.

And failing business plan? We had a bad one, and since Leo and the gang left, the new one has done fairly well. Parker's plan is to become the largest airline (for one week, until the others merge and smash us), and then go back to BK court with $25 billion in debt. Great plan! At least a NWA/DL merger would have complementary route structures and a chance at succeeding.


Bye Bye--General Lee

I think your analysis is kinda one-sided, General. If I was a Delta creditor I'd be saying "we just got that sucker to offer another billion!" I'd say they are in the driver's seat for both scenarios: to merge and not to merge.

 

[737 Pylt]

I think your analysis is kinda one-sided, General. If I was a Delta creditor I'd be saying "we just got that sucker to offer another billion!" I'd say they are in the driver's seat for both scenarios: to merge and not to merge.

Using your logic then, (and I'm not saying I disagree) why not let parker just dig himself into an even bigger hole, pour more $ into this (what will be a failed new company) hostile takeover, and really cash out (the creditors, that is). Why stop at just adding another $$1 billion?
What's apparent, is parkers desparation. He himself said that DL was overvalued at $9-$12B. now he ups his bid by 20% and then throws another billion on top of it. Truly this is one scared man!

737

 

[Bavarian Chef]

Using your logic then, (and I'm not saying I disagree) why not let parker just dig himself into an even bigger hole, pour more $ into this (what will be a failed new company) hostile takeover, and really cash out (the creditors, that is). Why stop at just adding another $$1 billion?
What's apparent, is parkers desparation. He himself said that DL was overvalued at $9-$12B. now he ups his bid by 20% and then throws another billion on top of it. Truly this is one scared man!

737

I don't understand your point. It's a negotiation so the creditors don't have ALL the cards.

I must have missed sumpin: what is he scared of?

 

[737 Pylt]

I don't understand your point. It's a negotiation so the creditors don't have ALL the cards.

I must have missed sumpin: what is he scared of?

My bad....
Basically, he's scared of DL coming out of BK and kicking his ass! He knows already DL has lower CASM's and will bury US Airways in competition!
The creditors as you know don't give a rats hiney about the company or the people. All they want is their money back. So if he keeps upping his bid, driving the stock price higher, they stand to make out like bandits! Look at LCC stock today alone. Every time he ups his bids, the stock skyrockets.
Look at what happened to it after he faltered on capitol hill!
I've seen it at a high of around 60something, and today alone its up over $3.50.
I also might add, he's not the one calling the shots, his bosses are. He's just a pawn, and not a real good one at that!

737

 

[General Lee]

Who besides pilots truly cares if this thing is pathetic or not? It's just politics and business for everyone else replete with sound bites. For the most part this is just another filler article ahead of the deadline and still no one knows for sure what the creditors are going to do which is where this thing has been for a while now. It's only interesting if that extra bil was part of negotiation between Parker and the committee to come up with terms they would agree too, but there is nothing to indicate that and it just as easily be Parker upping the offer to the max he has on his credit card.

Of course, the actual Creditor committee did not approach Parker with this, the ad hoc committee did. We have watched the ad hoc committee (made up of bond holders with claims of about $2.2 billion, or about the same as Dalpa) do this before, demanding that Delta look into this merger. But, since they are not the official committee, nothing has to be done at all. However, I expect the official committee to look into this anyway. And, I think the political arena is telling Parker a big NO (with 2 Senators writing Alberto Gonzolas stating any future look into this merger had better be thorough...or time consuming), and Parker may get another earful from Oberstar on Feb 15th, if it gets that far. We shall see. Here is part of that article on the first page of this thread:




"A spokeswoman for US Airways confirmed that the airline's advisers have been in contact with advisers for the ad hoc committee of Delta creditors, but she declined to comment on any specifics. A Delta spokesman declined to comment.


It isn't known whether the additional $1 billion is swaying any of the Delta creditors on the official committee closer to supporting the US Airways takeover bid. Any sign that the committee is wavering in its endorsement of Delta's strategy to exit from bankruptcy protection on its own this spring would likely have to emerge in the next several days.

The sweetened offer came after US Airways was approached late Friday by a group of Delta creditors that aren't part of the official committee, said the people familiar with the matter. The outside group, consisting largely of short-term investors who are more interested in the US Airways takeover than the official committee, proposed that the bid be increased by more than $2 billion, these people said. The ad hoc group also indicated that some of its members would be willing to publicly state their support for the acquisition."



Bye Bye--General Lee

 

[xanderman]

I agree

My bad....
Basically, he's scared of DL coming out of BK and kicking his ass! He knows already DL has lower CASM's and will bury US Airways in competition!
The creditors as you know don't give a rats hiney about the company or the people. All they want is their money back. So if he keeps upping his bid, driving the stock price higher, they stand to make out like bandits! Look at LCC stock today alone. Every time he ups his bids, the stock skyrockets.
Look at what happened to it after he faltered on capitol hill!
I've seen it at a high of around 60something, and today alone its up over $3.50.
I also might add, he's not the one calling the shots, his bosses are. He's just a pawn, and not a real good one at that!

737

I agree! The sad thing is he could have a great competitive airline yet he refuses to recognize labors contribution to his wealth thereby pissing us off and ruining any chance of really competing...

Parker finish the current merger like you promised and show us you really mean all that feel good rhetoric by negotiating at the table and giving us a fair and equitable contract!!!


Andy

 

[400ADude]

I think your analysis is kinda one-sided, General. If I was a Delta creditor I'd be saying "we just got that sucker to offer another billion!" I'd say they are in the driver's seat for both scenarios: to merge and not to merge.

I don't think there is a question as to whether or not they will merge. Just who is it going to be with and how the creditors can get as much money off the sinking boat. If they don't merge, Delta is gone.

 

[Hpilot]

My bad....
Basically, he's scared of DL coming out of BK and kicking his ass! He knows already DL has lower CASM's and will bury US Airways in competition!
The creditors as you know don't give a rats hiney about the company or the people. All they want is their money back. So if he keeps upping his bid, driving the stock price higher, they stand to make out like bandits! Look at LCC stock today alone. Every time he ups his bids, the stock skyrockets.
Look at what happened to it after he faltered on capitol hill!
I've seen it at a high of around 60something, and today alone its up over $3.50.
I also might add, he's not the one calling the shots, his bosses are. He's just a pawn, and not a real good one at that!

737

HAH hahaHAh haahha ha! The big bad Delta. Seriously though, do you really think Parker has anything to be scared of. He could quit tomorrow and live comfortably for several lifetimes. If you want to say we're afraid(US pilots), maybe I'd buy that. I think if you really want to see someone that's shaking, go look in the mirror.