Ex737Driver
Contract 2020????
- Joined
- Aug 14, 2004
- Posts
- 1,240
Seems like everyone wants to throw their hat in the ring as well as thier two cents into this convoluted cluster-fcuk.
http://online.wsj.com/article/SB119505714456992875.html?mod=yahoo_hs&ru=yahoo
Hedge Fund Pardus Pushes
For Delta-United Merger
By SUSAN CAREY
November 14, 2007 11:29 a.m.
A hedge fund with stakes in Delta Air Lines Inc. and United Airlines parent UAL Corp. sent a letter to Delta management Tuesday renewing its calls for airline consolidation and specifically advocating a merger of Delta and United.
In the letter, Pardus Capital Management LP, which holds 7 million Delta shares and 5.6 million UAL shares, said it believes "it is imperative" that Delta "enter into a merger transaction with another carrier given the rapid rise in fuel prices and the increased risk to the business as a stand alone entity." Pardus, which noted that the letter was a followup to a Sept. 7 missive to Delta, said it has consulted industry experts including airline consulting firm SH&E and Gordon Bethune, former chief of Continental Airlines Inc.
With their input, Pardus studied potential combinations of Delta with United, Northwest Airlines Corp. and Continental, according to the letter, signed by Karim Samii, Pardus president, and Shane Larson, principal. "Pardus believes the most attractive and practical combination would be a Delta and United Airlines combination," the letter said, because that pairing would produce $585 million in synergies achieve more network breadth than the other combinations.
Pardus went on to recommend a stock-for-stock merger in which Delta shares would be issued to UAL holders, with each UAL holder receiving 2.395 Delta common shares. The hedge fund estimated that the combined company's stock would be valued at $53 a share in 2012, a 75% improvement from today. Pardus also "would support the Delta management team leading the strategic direction of the combined entity," with UAL Chairman and CEO Glenn Tilton serving as nonexecutive chairman for the next year or two.
The letter was sent to Richard Anderson, Delta's new CEO, Edward Bastian, Delta's president and Daniel Carp, chairman of the Atlanta-based airline. Delta, under previous CEO Jerry Grinstein, opposed a hostile takeover of Delta by US Airways Group Inc. early this year, saying that Delta was better off emerging from bankruptcy-court protection as an independent carrier. US Airways' effort fizzled, but its CEO, Doug Parker, remains an outspoken proponent of airline mergers.
Mr. Anderson, who succeeded Mr. Grinstein in September, quickly signaled that he believes airline consolidation could benefit Delta. His comments during the carrier's third-quarter results conference cal were echoed in varying degrees of enthusiasm by all the other major carriers' executives. Mr. Tilton, UAL's chief, has been advocating consolidation in the industry for several years.
Write to Susan Carey at [email protected]
http://online.wsj.com/article/SB119505714456992875.html?mod=yahoo_hs&ru=yahoo
Hedge Fund Pardus Pushes
For Delta-United Merger
By SUSAN CAREY
November 14, 2007 11:29 a.m.
A hedge fund with stakes in Delta Air Lines Inc. and United Airlines parent UAL Corp. sent a letter to Delta management Tuesday renewing its calls for airline consolidation and specifically advocating a merger of Delta and United.
In the letter, Pardus Capital Management LP, which holds 7 million Delta shares and 5.6 million UAL shares, said it believes "it is imperative" that Delta "enter into a merger transaction with another carrier given the rapid rise in fuel prices and the increased risk to the business as a stand alone entity." Pardus, which noted that the letter was a followup to a Sept. 7 missive to Delta, said it has consulted industry experts including airline consulting firm SH&E and Gordon Bethune, former chief of Continental Airlines Inc.
With their input, Pardus studied potential combinations of Delta with United, Northwest Airlines Corp. and Continental, according to the letter, signed by Karim Samii, Pardus president, and Shane Larson, principal. "Pardus believes the most attractive and practical combination would be a Delta and United Airlines combination," the letter said, because that pairing would produce $585 million in synergies achieve more network breadth than the other combinations.
Pardus went on to recommend a stock-for-stock merger in which Delta shares would be issued to UAL holders, with each UAL holder receiving 2.395 Delta common shares. The hedge fund estimated that the combined company's stock would be valued at $53 a share in 2012, a 75% improvement from today. Pardus also "would support the Delta management team leading the strategic direction of the combined entity," with UAL Chairman and CEO Glenn Tilton serving as nonexecutive chairman for the next year or two.
The letter was sent to Richard Anderson, Delta's new CEO, Edward Bastian, Delta's president and Daniel Carp, chairman of the Atlanta-based airline. Delta, under previous CEO Jerry Grinstein, opposed a hostile takeover of Delta by US Airways Group Inc. early this year, saying that Delta was better off emerging from bankruptcy-court protection as an independent carrier. US Airways' effort fizzled, but its CEO, Doug Parker, remains an outspoken proponent of airline mergers.
Mr. Anderson, who succeeded Mr. Grinstein in September, quickly signaled that he believes airline consolidation could benefit Delta. His comments during the carrier's third-quarter results conference cal were echoed in varying degrees of enthusiasm by all the other major carriers' executives. Mr. Tilton, UAL's chief, has been advocating consolidation in the industry for several years.
Write to Susan Carey at [email protected]
