Proposed Merger News

[usa1]

Could AMR Acquire US Airways in Bankruptcy?

[background=transparent]A veteran airline analyst says the scenario for a US Airway/American Airlines merger could develop in an unanticipated way, with bankrupt American making a tender offer for its rival during its reorganization.[/background]

[background=transparent]While speculation has focused largely on an acquisition by US Airways, Imperial Capital analyst Bob McAdoo maintains that an acquisition by AMR is “a clear possibility that should not be overlooked.[/background]
[background=transparent]”AMR has the exclusive right to submit a (reorganization) plan through the end of the year,” McAdoo wrote, in a newly issued reported. “We believe that AMR could craft a credible plan that includes tendering US Airways’ shares while still in bankruptcy. Given the strengths of a combined AMR-US Airways entity, we believe AMR should be able to convince the creditors committee that taking over US Airways is central to allowing it to compete successfully.”

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[AAStew]

Could AMR Acquire US Airways in Bankruptcy?


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This is an article for August 2012...much has happened since then.

 

[usa1]

Right http://www.forbes.com/sites/tedreed/2012/08/17/analyst-could-amr-acquire-us-airways-in-bankruptcy/

Article also said "In any case, who would run the new American is an intriguing ". That looks to be Parker now.

Heard 70% to AA and 30% to US investors. Will this be US stock, AA stock or stock in a NEW company? What do you think?

 

[wings396]

Most likely new stock for the combined companies.

 

[jimntx]

As was pointed out earlier by someone else...I can not imagine any UCC member in their right mind approving a deal where the deal maker is not putting up a dime of his/her own money. Anyone can issue "stock" in a new entity. That stock having any real value is another issue entirely. Just look at what happened when Facebook went public. A company whose name is mentioned thousands of times a day by millions of people (exactly why escapes me, but that is another issue), and the stock plummeted almost instantly from its issue price.

No one--especially DP--has explained how the new entity can afford to pay the PMAA employees what DP promised them. This question does not even take into account the question of how to pay the PMUS employees the same amounts. And, if I were a PMUS employee I wouldn't stand for an instant a situation where the PMAA employees in the same job with the same seniority were being paid substantially more than I after a merger.

 

[usa1]

Most likely new stock for the combined companies.

Are you saying either new AA or US stock, in the combined companies. Or NEW stock in a NEW company? Makes a big difference to employees with no REAL retirement, stuck in the PBGC mess?

 

[jcw]

there is no AA stock they are in BK - to come out of BK you issue new stock - so the only currency AA would have in BK to buy US is cash which is not feasible

 

[usa1]

So I interpret that as AMR is gone ... and shares of the combined airline would be issued in LCC stock @ 70/30%? Hope not .... hope it's in NEW stock for a NEW company.

 

[jcw]

lots of companies change tickers upon mergers - so they will probably come out with a new symbol - AA would have to have a new symbol when they emerge from BK if they emerge independant

 

[usa1]

http://www.wcnc.com/...-183594201.html

Parker likely to lead

Many analysts expect Parker’s executive team to take over the combined airline if the deal is done during bankruptcy. He’s done it before: In 2005, Parker led smaller America West to take over US Airways while the larger carrier was in bankruptcy proceedings and brought much of his management team with him.

“It is becoming increasingly apparent that AMR’s current leadership is losing control of its fate now that its workers and its creditors have become convinced that whatever happens, somebody else needs to run this company,” wrote analyst Vicki Bryan for independent bond rating agency Gimme Credit on Wednesday

Kaplan said that Parker could become CEO while American’s Horton became chairman of the company for a few years, similar to what happened with the leadership of Continental and United when those carriers merged.

“It would look a lot like an acquisition of American by US Airways,” Kaplan said.

Sheds very little light on my question? But in 2005 the smaller carrier belong to Parker and it became the larger while the larger was in BK?

 

[FA Mikey]

As to date has yet to merge them together. Thats not much for management experience. It goes to show even with a much smaller carrier he is in way over his head.

 

[usa1]

He was wise to stay out of the pilot fight? ..... He benefited while they fought. Had very little effect on the airlines operation .... and helped the bottom line. This merger should end that conflict.

I just hope we are a NEW company, technically.

 

[FWAAA]

The thing is, if US had paid the pilots and FAs wages in the ballpark of UA, DL and AA wages since the merger in 2005, then US would not have been profitable.

So if Parker gives the AA employees raises (which he promised them in the CLAs) and finally raises the pay of the US pilots and FAs to the same level, then how will the new AA (merged with US) be profitable?

That's the question that none of the cheerleaders for this merger have ever answered. Unless you believe in the fantasy of "synergies."

Yes, LCC has been a great success, funded on the backs of its flying professionals.

 

[FWAAA]

So I interpret that as AMR is gone ... and shares of the combined airline would be issued in LCC stock @ 70/30%? Hope not .... hope it's in NEW stock for a NEW company.

If there's a merger, new stock will be issued. Let's call it NEWMERGEDAMR. Parker proposed that LCC stockholders exchange their stock for 30% of the new stock in NEWMERGEDAMR and that the AMR creditors (including the employees) get a mere 70% of the new stock.

Parker's on crack if he thinks the AMR creditors are going to transfer that much value to LCC stockholders - at most, LCC holders should get 15% and AMR creditors get 85%.

 

[Itestwell]

As to date has yet to merge them together. Thats not much for management experience. It goes to show even with a much smaller carrier he is in way over his head.

Except for the little fact that Doug and co. are now the darlings of Wall St: They have figured out a foolproof way to keep labor costs astronomically low in comparison to their network competitors, all while running a pretty impressive operation: Almost #1 in baggage, on-time, and vast improvement in the complaints department. We can talk about the lack of customer service and onboard amenities all we want, but according to the DOT, Doug is running a pretty solid airline, all on the backs of labor.

And! The clincher? The employees are turning out these stellar results all while continuing to infight east v west. The AFA members have kept the labor costs lower for him twice now, and Doug, Wall St, and the shareholders of LCC find this new style of management nothing short of genius. The employees have become so focused on arguing amongst one another, that they're fine with bankruptcy era contracts (US) and continued subpar wages (HP).

Then, you have former AFA MEC Presidents and LEC Presidents and their ill- informed worker bees running around campus telling FAs they deserve so much more, spewing misinformation, and ensuring NO votes! It's like Doug and Co planned this, and these people are ensuring his further economic success! LOL

Keep rambling on and on and on that US is so poorly managed, Doug can't run an airline, the place is a mess, etc. Unfortunately from a DOT, Wall St, and management standpoint, nobody seems to mind. I have yet to see a Wall St type or LCC shareholder utter the words, "but what about the employees?" while they're counting their cash.... Maybe I've missed it.

I wonder when the majority of labor at US will get this, if ever. It would be comical, if so many of our employees weren't filing for personal Chapter 11 and losing homes in droves.

At least we're "showing them". Doug needs labor settled to get a merger done...... right? That's what all the papers stuffed in my mail file during the two AFA votes said.