Is USAirways hostile takeover Of AA for Real?

[FWAAA]

I think there was a congressional hearing,from what i can remember, and Parker was chastized for coming up with the 11 billion $$ for DL, when only a year previous, U had dumped all the pension plans to the PBGC before emerging from BK again in 2005.

Grandstanding Representatives and Senators at a Congressional hearing doesn't mean that Congress has any approval/disapproval say whether or not two companies merge.

A lot of people see their Rep or Senator grilling business people at a hearing and assume that the Congressional hearing is part of the merger process, when in fact it is not. Just grandstanding politicians.

From what you post, the creditors had the final say, but I believe there were antitrust issues at that time with regard to legacy carriers consolidating. Consequentely, the consolidation occurred with the laegacies anyway as time progressed.

Creditors always have the final say in bankruptcy - after all, they get a plan of reorganization or the debtor is liquidted, and they vote on which they will accept. Parker's attempted hostile takeover did not fail because of any antitrust concerns - it failed because the DL unsecured creditors didn't vote for Parker's POR.

 

[yoyodyne]

Creditors always have the final say in bankruptcy - after all, they get a plan of reorganization or the debtor is liquidted, and they vote on which they will accept. Parker's attempted hostile takeover did not fail because of any antitrust concerns - it failed because the DL unsecured creditors didn't vote for Parker's POR.

More like Parker's POS I think...

 

[Buck]

UPDATE: Judge Says AMR Can Keep Control of Bankruptcy Case
1 hours 38 minutes ago - Dow Jones News

--AMR has until December to file a reorganization plan without threat of rival proposals
--The company said it is exploring "several interesting" options
--US Airways has courted AMR for months
(Adds comments from AMR in third and fifth paragraph, and earnings results in fifth paragraph.)
By Joseph Checkler

A judge on Thursday gave AMR Corp. (AAMRQ) until late December to control its own bankruptcy case, as the American Airlines parent begins to seriously consider a merger and continues to negotiate deals with its main unions.
Judge Sean H. Lane of U.S. Bankruptcy Court in Manhattan approved the extension, just a few hours after AMR Chief Executive Tom Horton discussed the company's merger possibilities with US Airways Group Inc. (LCC) Chief Executive Doug Parker over oatmeal in Washington, a meeting reported by The Wall Street Journal.
In a statement later Thursday, AMR said it will pursue "several interesting options, to deliver the highest value for our financial stakeholders and the best outcome for our people."
Judge Lane's approval gives AMR until Dec. 28 to file its own bankruptcy reorganization plan without the threat of rival proposals, and until Feb. 28, 2013, to solicit votes on that plan. Without the judge's approval of the proposal, which was supported by both AMR's creditors and US Airways, the periods would have run out Sept. 28 and Nov. 29.
"We believe the extension reflects the progress and momentum of our restructuring efforts as reflected in our 2Q results, and we will continue to move aggressively to complete both our plan and our comprehensive process of reviewing a range of alternatives to measure against it," AMR said in its statement. The company on Wednesday recorded its first profit for the June quarter in five years, and reported record revenue.
A lawyer for US Airways rose to speak in court on Thursday, but Judge Lane said he didn't need to hear anything from him.
"I know US Airways' interest in the case," Judge Lane said, adding, "I don't want to get sidetracked." US Airways said in court papers that it is an AMR creditor.
Aside from more seriously considering a merger, AMR is in the process of changing labor pacts with the unions representing its mechanics, pilots and flight attendants. Earlier this year, the company wrapped up a trial with the unions over whether AMR can terminate their current agreements, which the company said would help it cut more than $1 billion in labor costs.
Judge Lane is set to rule on whether those contracts can be terminated by next month, but the date has been flexible as AMR has continued to negotiate settlements with those unions.
The possibility of a merger, though, is still the most notable item on AMR's agenda. After saying for months that it wanted to pursue a standalone restructuring plan, AMR has recently publicly warmed to the merger idea.
Its unions all say they support a marriage with US Airways, which the workers said would offer better terms than a standalone AMR.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

--Mike Spector in New York and Susan Carey in Chicago contributed to this article.

Write to Joseph Checkler at [email protected]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires
July 19, 2012 14:44 ET (18:44 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.

 

[PITbull]

UPDATE: Judge Says AMR Can Keep Control of Bankruptcy Case

Love this quote taken from the article above:

"A lawyer for US Airways rose to speak in court on Thursday, but Judge Lane said he didn't need to hear anything from him.
"I know US Airways' interest in the case," Judge Lane said, adding, "I don't want to get sidetracked." US Airways said in court papers that it is an AMR creditor. "

It's like saying..."sit down, and shut up already".

 

[PITbull]

Doug Parker quoted in the Charlotte Times: "An AA merger is good for CLT".

Sounds very familiar when US Airways merged with PSA and Piedmont Airliines in 1989. Pittsburgh Hub expanded and spent $1 billion $$ for airport expansion to accomodate US Airways. US Airways promised that this merger was good for Pittsburgh's HUB expansion, and wanted the airport to be built at their specifications. The new airport was built in 1992, and US Airways dumpted the gates/lease contracts in BK 2003, and stuck the communities with the debt.

http://obsdailyviews...d-news-for.html

 

[700UW]

Parker and Horton met this morning.

http://blogs.star-te...fast-in-dc.html

 

[700UW]

Horton initiated the meeting.

http://www.charlotteobserver.com/2012/07/19/3391947/us-airways-american-ceo-meet-to.html

 

[FA Mikey]

Then followed that breakfast with this comment.


American Airlines Needs Merger Less Than Suitor, CEO Says

American Airlines Chief Executive Officer Tom Horton said his bankrupt company’s value is increasing, so it doesn’t need a merger as badly as suitor US Airways Group Inc. (LCC)
“American is not going to determine its strategic future based on the urgent need of another company to make a deal,” Horton said in an interview at Bloomberg’s global headquarters in New York. “The value of our company is increasing,” he said, while the value of US Airways “is probably at its high water mark.”

Oh my!

http://www.bloomberg...html?cmpid=yhoo

 

[jersey777]

That will be the UCC's decision Mr. Horton...not yours.

 

[AAviator]

Yep,.. The market liked it so much, LCC immediately lost ~ 7% of its share price.

Here's an article from a few months ago where Mr. Buffet, er, ah, Parker says the intent is to merge with AA while in BK.

http://www.bloomberg.com/news/2012-03-23/us-airways-said-to-brief-amr-creditors-on-takeover-plan.html

Now it appears the industry giant, Mr. Greenspan, er ah, Parker, may not get that chance...

 

[AAviator]

Here's a timely video and article from McNews...

http://www.usatoday.com/money/flights/travel/story/2012-07-19/American-Airlines-resists-US-Airways-pressure-to-merge/56345594/1

 

[jersey777]

Why are you posting an article from March 23rd?

 

[FA Mikey]

As Horton put it, usair add nothing to AA.

 

[AAviator]

Why are you posting an article from March 23rd?

Because thats where Mr. Gates, er, ah Parker stated he wanted AA while in BK.

While in BK, he can drop leases, tweek the fleet, and shape a merger to his liking... It appears that option may not happen for him.

I find it amazing how desperate his behavior is..

BTW, the McNews link is just hours old....

And why do you care?????

 

[jersey777]

I care because I have over 21 years invested in this company and I hope to stay here for at least 13 more years so I can retire from a company I am proud of. I want what almost every analyst believes is the strongest, long lasting outcome for this company. The only ones who don't want this to happen are Horton and a select few posting on here. If you want to believe Horton and whatever drools out of his mouth then so be it. I choose to believe these people:

• 
  
  [indent=1.5]
  
  "I don't know anybody who's looked at it from 30,000 feet that would tell you that they think the standalone scenario is superior. [AMR] has not competed well when it was going from No. 1 to No. 2 now to the third position, and I don't see how a standalone would solve that, especially with this 'shrink and then re-grow' strategy they are doing."
  – ROBERT W. MANN, AIRLINE ANALYST, R.W. MANN & COMPANY (06/07/12)
  
  
  
  
  “AMR has a network disadvantage today, which has resulted in a substantial revenue disadvantage. A combined AMR-LCC eliminates the weaknesses present in each standalone airline and we project revenue synergies of $1.5 billion annually.”
  – WILLIAM GREENE, MANAGING DIRECTOR, MORGAN STANLEY (6/10/12)
  
  “US Airways still has a strong presence on the East Coast via its Charlotte (CLT) and Philadelphia (PHL) hubs, which together represent 67% of the company's traffic…Interestingly, US Airways, although mostly a domestic carrier, flies to more European destinations out of PHL than AMR does out of JFK, further indicating AMR's weak East Coast footprint. Thus, we think combining the carriers will expand revenue since AMR will benefit from US Airways' east coast presence and US Airways will benefit from AMR's Latin American exposure in Miami and Dallas. We believe the increased East Coast presence will enable AMR to shrink its revenue gap and lower its salary costs.”
  – BASILI ALUKOS, EQUITY ANALYST, MORNINGSTAR (6/7/12)
  
  Buddy La Follette
  st Updated 6/13/12
  “LCC and AMR together would be stronger than AMR alone, we believe. We view LCC’s route structure as being very complementary to AMR’s. LCC’s substantial eastern U.S. market presence, which it efficiently manages through its Philadelphia and Charlotte hubs, have much greater connectivity than AMR’s hub at JFK. AMR has struggled to generate this kind of connecting traffic in order to compete with Delta and United out of New York. The combined company could capitalize on LCC’s strong Eastern presence and combine both companies’ sizeable international presence to compete more effectively with United and Delta.”
  – BOB MCADOO, ANALYST, IMPERIAL CAPITAL (5/29/12)
  
  
  
  "Bottom line, 55,000 employees at AMR aren’t wrong; and it’s hard to envision the creditor’s committee ultimately supporting a plan where labor isn’t onboard. The precedent is powerful; consolidated airlines make superior business models.”
  – DAN MCKENZIE, ANALYST, RODMAN & RENSHAW (6/13/12)
  
  
  “A combined LCC/AMR, managed by the current LCC leadership, would be a stronger entity than would a standalone AMR, in our opinion. The added benefits of a merged entity would come from adding LCC’s substantial Eastern U.S. market presence and LCC’s existing Trans-Atlantic operation to AMR’s operation.”
  – BOB MCADOO, ANALYST, IMPERIAL CAPITAL (5/29/12)
  
  
  “The bottom line is that we believe a merger between AMR Corporation and US Airways would create a formidable competitor to both Delta and United. We also think that an AA/US merger would be positive for the US airline industry. Lastly, a deal would still need approval from the Department of Justice which typically focuses on city-pair concentration. In that regard, American and US Airways’ networks are complementary with only a dozen or so overlap routes out of several 1,000 domestic city-pairs.”
  – MICHAEL LINENBERG, MANAGING DIRECTOR, DEUTSCHE BANK SECURITIES (05/28/12)
  
  
  “Consolidation is positive for airline fundamentals in a number of ways but most importantly: (1) greater concentration of capacity in the industry would deter irrational pricing activity, (2) consolidation could take labor expense to levels similar to DAL/UAL, normalizing cost structures and reducing the incentive to price aggressively, and (3) consolidation could result in more conservative capacity trends at LCC/AMR.”
  – WILLIAM GREENE, MANAGING DIRECTOR, MORGAN STANLEY (6/10/12)
  
  "Such a merger would not be detrimental to oneworld. In terms of the joint business agreement any consolidation that increases the choices for our customers would be welcomed.”
  – INTERNATIONAL AIRLINES GROUP (06/07/12)
  
  “We think that an AA/US merger will be positive for the US airline industry. We also think the implications of a merger are positive for global airlines, particularly those in the oneworld alliance.”
  – MICHAEL LINENBERG, MANAGING DIRECTOR, DEUTSCHE BANK SECURITIES
  
  (05/28/12)
  
  
  
  “The merger of US Airways and American has far more positive benefits than negative ones and their merger would play a major role in making the US Airline industry better! History shows a long list of once great airlines that failed. Each of those failed airlines had one thing in common. They all failed to remain competitive. It's the opinion of AirlineFinancials.com that American and US Airways must merge to remain long-term competitive.”
  – ROBERT HERBST, ANALYST, AIRLINEFINANCIALS.COM (4/20/12)
  
  
  “We estimate that AMR bondholders with impaired claims face a 21% downside if AMR doesn't merge with US Airways and a 41% upside if a merger occurs based on current trading levels; AMR shareholders get wiped out regardless; and US Airways shareholders have 30% downside with no deal and 59% upside if a deal occurs and the entity achieves all of our projected synergies.”
  – BASILI ALUKOS, EQUITY ANALYST, MORNINGSTAR (6/7/12)
  [/indent]