Delta US Air bid, more big money flows in

[9rj9]

Reuters
Morgan Stanley to help finance US Air's Delta bid
Monday January 8, 9:08 am ET
CHICAGO (Reuters) - US Airways Group (NYSE:LCC - News) on Monday said it would add Morgan Stanley (NYSE:MS - News) as a joint lead arranger with Citigroup (NYSE:C - News) to underwrite the airline's $7.2 billion debt financing for its proposed merger with Delta Air Lines (Other OTC:DALRQ.PK - News).
The addition requires the approval of US Airways' board. It would also allow the airline to add other financial institutions to the underwriting syndicate.
"These two world-class firms, combined with the possibility for a third firm, reinforce the financial community's confidence in the value creation of our proposed merger with Delta," US Airways Chief Financial Officer Derek Kerr said in a statement.
The airline in November made a hostile bid for bankrupt Delta. Delta's management has rejected the offer, currently worth $8.6 billion based on US Airway's closing share price on Friday. US Airways is appealing to Delta's unsecured creditors for permission to conduct more thorough research into the company.

 

[OPECJet]

Ah yes. Darth Parker and his quest for world domination! Film at 11!

 

[Marko Ramius]

While it wasn't a hostile deal, this is the same mo Parker used with Airways, adding additional investors along the way after the initial investment. Maybe he's trying the same thing here, but with the goal of making the pot sweeter for DAL's creditors. imp:And yes General, we all know your opinion is that it won't matter.

 

[General Lee]

Well, their credit ran dry at Citigroup, so they went for more. It is kinda like someone over using many credit cards during XMAS. There are always people out there that will lend you money. Regardless, you need to read the last sentence--"they are appealing to the unsecured creditors." Really, that means the unsecured creditor committee, since they will make the decision. And, Parker is trying to win the votes of creditors that actually want to see an independent DL, which is probably the majority. Also, the DOJ and Transportation Sub Committee will likely shoot it down anyway. I haven't seen one Congressman in favor of this---and the loud ones are even in the states with current USAir hubs.


Bye Bye--General Lee

 

[grog_sit_reserv]

General, what's the deal? I figured your reply would be the 2nd not the 3rd; actually, I thought you would of posted this one yourself.

You're losing your touch.

 

[General Lee]

General, what's the deal? I figured your reply would be the 2nd not the 3rd; actually, I thought you would of posted this one yourself.

You're losing your touch.

Wow, you're right. I better not take showers any more....

Bye Bye--General Lee

 

[General Lee]

While it wasn't a hostile deal, this is the same mo Parker used with Airways, adding additional investors along the way after the initial investment. Maybe he's trying the same thing here, but with the goal of making the pot sweeter for DAL's creditors. imp:And yes General, we all know your opinion is that it won't matter.

USAir and AWA had a good merger, primarily because the route strutctures fit well, the planes were close, and both parties wanted to merge. The DOJ saw the lack of overlap and the interested parties (plural), and saw that no communites were hurt by that merger. It was approved. This takeover is not even close to the USAir/AWA merger. Everyone knows it. Parker getting a few more banks or under writers to try to fund this won't change that.


Bye Bye--General Lee

 

[FDJ2]

"to underwrite the airline's $7.2 billion debt financing"

No new money, just another underwriter. This might be news if Parker actually raised his offer, which was turned down. I don't see adding another underwriter and not adding more $$$ to the offer as sweetening the deal.

 

[xanderman]

...

I don't think it sweetens the deal but it does suggest that wall street is looking fondly at this idea. Morgan Stanley wants in when the cash flow starts thats all. And GL if the money has not been spent yet then how can it dry up the credit? Are you suggesting that one would have bad credit if he held 50 creditcards all with a zero balance? All Citigroup and MS are doing is waiting to lend the cash. Hoping that Parker can spend it fast so they can watch the interest pile high...
Andy

 

[General Lee]

I don't think it sweetens the deal but it does suggest that wall street is looking fondly at this idea. Morgan Stanley wants in when the cash flow starts thats all. And GL if the money has not been spent yet then how can it dry up the credit? Are you suggesting that one would have bad credit if he held 50 creditcards all with a zero balance? All Citigroup and MS are doing is waiting to lend the cash. Hoping that Parker can spend it fast so they can watch the interest pile high...
Andy

You are correct. The banks want to give Parker money. Even Phil Baggeley said so, that anyone can get money now if they want to. As far as Wall St accepting Parker's plan, that really isn't the case. The shares have been going down as of late, except when gas started to go down and every airline got a boost. There are a lot of bonuses hinging on giving out a bunch of money and watching those interest payments pile up. MS and Citicorp want the business, absolutely.


Bye Bye--General Lee