Will ATA (MatlinPatterson) buy SWA??

[FlyBoeingJets]

http://yahoo.reuters.com/news/artic...6-26_22-13-59_N26374047&type=comktNews&rpc=44

MatlinPatterson raises new $5 billion fund--source

Tue Jun 26, 2007 6:14pm ET


By Dane Hamilton


NEW YORK, June 26 (Reuters) - "Vulture" firm MatlinPatterson LP is set to close on a new private equity fund of about $5 billion to buy distressed companies, making it one of the largest such funds, a source close to the matter said on Tuesday.
MatlinPatterson, founded by veteran distressed debt specialists David Matlin, Mark Patterson and Lap Chan, originally sought to raise some $3.5 billion for the firm's third fund.
But demand for the fund exceeded supply and it was oversubscribed by $1.5 billion, the source said, reflecting some experts' views there will be many more opportunities to invest profitably in debt-strapped companies over the next few years.

MatlinPatterson seeks to buy controlling stakes in companies in financial straits on a global basis, often by buying publicly traded debt and converting it to equity stakes, either in or out of bankruptcy court.
The firm disclosed on Tuesday that it agreed to sell one of its longest-held investments, chemical maker Huntsman Corp. (HUN.N: Quote, Profile , Research), to Basell (BASL.UL: Quote, Profile , Research), which is owned by privately held U.S. industrial group Access Industries. MatlinPatterson and the founding Huntsman family held 57 percent of Huntsman common stock.
The firm is also considering a major investment into Italian airline Alitalia (AZPIa.MI: Quote, Profile , Research).
MatlinPatterson declined to comment.
The fund-raising comes at a time when many experts in the restructuring advisory business -- lawyers, bankers and consultants -- forecast a rise in the number of corporate bankruptcies. This would provide more opportunities to firms such as MatlinPatterson, W.L. Ross & Co., Cerberus Capital Management and others, commonly know as "vulture" firms because they look to invest in companies facing serious problems.
But the numbers of debt defaults and bankruptcies remained stubbornly low due to wide availability of cash for distressed companies to refinance debt, much of it from hedge fund lenders.
"I don't see any upturn (in Chapter 11 bankruptcies) yet," said UCLA law professor Lynn LoPucki, a noted bankruptcy expert. "It goes on as long as there is a wash of money out there."

 

[SWA/FO]

5 Billion would not be enough....

 

[FlyBoeingJets]

http://biz.yahoo.com/rb/070626/southwest_anniversary.html?.v=1

Southwest braces for turbulence as it turns 30

Tuesday June 26, 4:16 pm ET
By Chris Reiter

NEW YORK (Reuters) - Southwest Airlines Co. (NYSE:LUV - News) once seemed impervious to the turbulence that buffeted other U.S. airlines, but on the eve of its 30th anniversary as a public company, the first and still the biggest U.S. low-cost carrier looks vulnerable. Big carriers like Delta Air Lines Inc. (NYSE:DAL - News) have cut costs in bankruptcy, low-fare competitors like JetBlue Airways Corp. (NasdaqGS:JBLU - News) offer unmatched perks such as live television, and Southwest's fuel hedges no longer provide the same level of protection from high fuel costs that they once did.
Southwest, which still has lower costs than most of its rivals and an unparalleled track record of profitability, is weighing responses that could include slowing fleet expansion, partnering with other carriers, and pursuing new sources of revenue such as selling hotel rooms through its Web site and offering in-flight Internet access.
"There's a transformation process under way," said Chief Executive Gary Kelly, speaking in New York at the Fortune Leadership Forum on Tuesday. "It's an intense time. I don't think our officers have ever worked harder."
More details of its plans are expected Wednesday, when the company hosts an analyst conference. Southwest, the sixth-largest carrier in the U.S. in terms of passenger traffic but the largest by market value, declined to comment on the plans beforehand.
The changes under way at the Dallas-based company, which Kelly says has never laid off staff or cut pay, could challenge the cozy relationship between management and labor. A committed workforce has been credited with fueling Southwest's strong customer satisfaction and earnings.
NO LAYOFFS
"They have a pretty high commitment to not laying off employees and that is challenging right now with all the automation and growth slowing down in the industry," said Jody Hoffer Gittell, a professor of management at Brandeis University and author of the book "The Southwest Airlines Way."
"It is critical to their culture to avoid layoffs as long as they can. That's a rough spot they're going to have to deal with," she said.
Southwest works hard to maintain its fun, quirky corporate culture. Kelly said in the hiring process, the company asks applicants to tell a joke.
But Wall Street lately has not been laughing. Concerns over slowing growth and uncertainty over how the company will react have weighed on Southwest's shares. Over the last 12 months, the shares have fallen about 10 percent, including a 2 percent drop Tuesday, while the Amex airline index (AMEX:^XAL - News) is largely unchanged.
The current struggles and the short-term view of many Wall Street investors has led some analysts to hypothesize that Southwest may be better off as a private company.
In April, CreditSights analyst Roger King said a leveraged buyout of Southwest would be a "no-brainer" to finance, but noted that the company would need to shift its philosophy "180 degrees" to accept it.

 

[FlyBoeingJets]

5 Billion would not be enough....

Perhaps the 5 Billion will be collateral for a 10 Billion dollar plus loan.

 

[HalinTexas]

That ain't enough, but since CitiBank practically owns UAL and many other banks and large institutional traders have large interests in other airlines, I wouldn't be surprised if some non-airline banker type makes some similar play.

MP is going after Alitalia.

Who the hell knows anymore.

 

[HalinTexas]

I believe SWA is worth upwards of $20B. But if you use SWA cash plus $5B in a leveraged buyout, and then sell it all back in an IPO.........

My head hurts.

 

[Kharma Police]

Will ATA offer preferential interviews to the SWA guys?

 

[SWA/FO]

http://www.wcpo.com/content/news/lo...ntent_id=f6d1a5f8-9d91-49b4-9e4d-bdd219533feb

this is the big announcement tomorrow..

 

[Dizel8]

http://www.wcpo.com/content/news/lo...ntent_id=f6d1a5f8-9d91-49b4-9e4d-bdd219533feb

this is the big announcement tomorrow..

That would be good news!

 

[737 Pylt]

This statement really raises an eyebrow!

NO LAYOFFS
"They have a pretty high commitment to not laying off employees and that is challenging right now with all the automation and growth slowing down in the industry," said Jody Hoffer Gittell, a professor of management at Brandeis University and author of the book "The Southwest Airlines Way."
"It is critical to their culture to avoid layoffs as long as they can. That's a rough spot they're going to have to deal with," she said.
Southwest works hard to maintain its fun, quirky corporate culture. Kelly said in the hiring process, the company asks applicants to tell a joke.

Of course SWA wouldn't be the first airline to promise no layoffs...........

737