Hedge fund using Bethune to sell for DAL-UAL deal

[GogglesPisano]

Hedge fund pushes hard for United-Delta deal
Pardus Capital Management makes case to major shareholders at both airlines that the two would be a good fit.
November 16 2007: 7:02 PM EST


ATLANTA (AP) -- A hedge fund that advocates a combination of Delta Air Lines and UAL's United took its case Friday to a group of investors in the two airlines, looking for support.

Gordon Bethune, an adviser to hedge fund Pardus Capital Management LP, said he led an 90-minutes presentation for what he called major shareholders in Delta and United.

The former chief executive of Continental Airlines said the discussion included talks on how to save the U.S. airline business, but the focus was on consolidating the Atlanta-based Delta and the Chicago-based United.

He said scenarios were also discussed about combining Delta with Northwest Airlines - the former company of Delta CEO Richard Anderson - and Delta with Continental. Bethune said many investors feel United is the most natural fit for Delta.

"Quite frankly, there are no reasons not to do it now considering oil is $95, and we are headed for a downward cycle in the airline business," he said.

He declined to identify what investors were at the meeting.

Delta spokeswoman Chris Kelly declined comment on Friday's investors presentation. United spokeswoman Jean Medina said while the company appreciates investors' opinions, "We will participate in business opportunities on our own terms."

Earlier this week, an official with knowledge of the talks told The Associated Press that United and Delta have been discussing a combination that would keep the United name and the corporate headquarters in Chicago.

Delta issued a statement denying "it had engaged in merger talk with United." United called the report of recent talks "wholly inaccurate."

Pardus, which holds about 2.5 percent of Delta's outstanding shares and about 4.8 percent in United, has been urging Delta's top management to make a deal with another airline in view of rising fuel prices and what it said are the increased risks of going it alone.

It said, "The most attractive and practical combination would be a Delta and United Airlines combination."

Delta (Charts, Fortune 500) shares rose 13 cents to $19.97 on Friday while UAL (Charts, Fortune 500) shares fell 35 cents to $42.91.

 

[ferlo]

"how to save the US airline business" what a crock of sh*t. How does an industry experiencing record profits need saving? They really mean shoving more injustice up the employees' ass.

 

[regionaltard]

Hmm, a bunch of investment bankers must have gotten together and decided that they should all have bigger fourth homes in the Hamptons at airline employees' expense. They're going to get paid no matter what else happens.

 

[Heavy Set]

Baffoon would do anything for the money. Anderson knows what would work and what would not work, and Padrus Investors, with their wopping 2% of the Delta stock, can suggest anything they want. Why again would United be a better fit than Northwest? It wouldn't. Read the Street article. Even Delta did an internal review and concluded that a United and Delta merge would not pass anti-trust immunity. Northwest and Delta, on the otherhand, have complementary hubs and route structures that would fit well without job loss, just like the America West and USAIR merger. Hedge funds love to stir the pot, and get guys like Baffoon to try to lobby for them.

 

[ferlo]

Hmm, a bunch of investment bankers must have gotten together and decided that they should all have bigger fourth homes in the Hamptons at airline employees' expense. They're going to get paid no matter what else happens.

l


Exactly, their money is in the "deal" not based in reality or even remotely tied to the longer term success of this failed, frankensteined, abortion of a business they've created.

 

[johnsonrod]

A merger-of-equals will not happen unless one is in absolute dire straits (near liquidation) like USAirways before the AWA/US merger. DAL and UAL will not happen. Too many jobs would be cut (redundancies - a very political issue) and customer choice would be reduced in many cases.

 

[AA717driver]

Johnson--I think you underestimate how many Congress-whores are owned by the hedge funds. TC

 

[michael707767]

Bethune is only in favor of mergers because the company that pays him is in favor of mergers. Lest we forget, about ten years ago Bethune turned down a merger offer from Delta.

 

[SDF2BUF2MCO]

Johnson--I think you underestimate how many Congress-whores are owned by the hedge funds. TC

No kidding. Frankly, I don't see any difference between politicians or executives except we seem to be more trusting of politicians.

 

[Palomino]

Bethune is only in favor of mergers because the company that pays him is in favor of mergers. Lest we forget, about ten years ago Bethune turned down a merger offer from Delta.

as i recall...there was a bit of Union influence on that decision. great story. i believe it was a Super Bowl weekend or thereabouts? someone remembers the specifics.

 

[CAL EWR B737]

Click here: Pilots react to merger news - Page 3 - Flightinfo.com Hangar


To save some bandwith try this link.

 

[737 Pylt]

as i recall...there was a bit of Union influence on that decision. great story. i believe it was a Super Bowl weekend or thereabouts? someone remembers the specifics.

I got this off a long winded article that's not too old.......


Enter: Leo Mullin -- who never did get it -- or grasp the "people" part.

Mr. Mullin had the initial good fortune to come in when the economy and markets were firing on all cylinders, but then buckled when times got tougher -- and imploded after 9/11. He came from the banking industry with no airline knowledge and then surrounded himself with other executives who also new nothing about running an airline or its people.

Three advanced education degrees on the wall did not equate to understanding the unique character or culture of the Delta employees. Leo Mullin could have had the distinct pleasure to deploy and support Delta's employees in earnest -- but didn't know how -- or worse -- why.

Mr. Mullins' entire tour at Delta could be summed up by his single statement to Continental CEO Gordon Bethune when the competition with Northwest to acquire Continental fell apart in 1998.

As reported by the Wall Street Journal, following Continental's choice to go with Northwest over Delta, Mr. Mullin's comment to Mr. Bethune was:

"Labor? You mean this deal fell apart over labor?"

737

 

[General Lee]

Johnson--I think you underestimate how many Congress-whores are owned by the hedge funds. TC

I really think you underestimate how much influence we also have with Congress. Here is an excerpt from that Street article provided by Heavy Set, the bottom paragraph:

"I must say you are an aggressive suitor," Lott told Parker. "But the lady from the South -- Atlanta -- doesn't seem to want to be forced into this shotgun wedding."
In fact, that hearing provided a strong indication that while a US Airways and Delta merger may have had backing from Wall Street and from hedge funds, it wasn't popular with lawmakers. A week later, it collapsed. Perhaps Westmoreland's comments should serve as a reminder that Congress will get involved if airlines move to consolidate. Not to say there won't be mergers, but clearly regional loyalists and various opponents will have a chance to be heard.




Bye Bye--General Lee

 

[Jmoney]

Influence

I really think you underestimate how much influence we also have with Congress. Here is an excerpt from that Street article provided by Heavy Set, the bottom paragraph:

"I must say you are an aggressive suitor," Lott told Parker. "But the lady from the South -- Atlanta -- doesn't seem to want to be forced into this shotgun wedding."
In fact, that hearing provided a strong indication that while a US Airways and Delta merger may have had backing from Wall Street and from hedge funds, it wasn't popular with lawmakers. A week later, it collapsed. Perhaps Westmoreland's comments should serve as a reminder that Congress will get involved if airlines move to consolidate. Not to say there won't be mergers, but clearly regional loyalists and various opponents will have a chance to be heard.



-We have so much influence, it gives us all gas.

-Free BJs at duty in and bottomless chips and salsa! We love this place!

-Bye Bye- general tard