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Today's Merger Thoughts for the Day: September 10, 2013
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[background=rgb(250, 250, 250)]The Wall Street Journal reported tonight that Tom Horton and Doug Parker are going to ask each company's Board to extend the merger termination date beyond December 13th. This news was leaked to the WSJ the day the two companies filed their reply to the DOJ's amended complaint. Is this coincidental or are the companies applying pressure to the Justice Department the same day the companies filed their reply to the Justice Department's Amended Complaint? And, the news leak that each CEO will ask their Board to extend the merger termination clause was made about 36 hours before a U.S. bankruptcy judge is scheduled to confirm AMR's POR. Is this coincidental too or another third-party comment to the Bankruptcy Court while behind the scene settlement negotiations are being conducted by the parties at 950 Pennsylvania Ave, NW, Washington, D.C. on the trapezoidal block between Pennsylvania Ave, Constitution Ave, and 9th Street? [/background]
[background=rgb(250, 250, 250)]This week three other important points became public: [/background]
[background=rgb(250, 250, 250)]1. Yesterday Wolfe Research Airline Analyst Hunter Keay said,"We believe DoJ will lose its case against AMR/LCC because of a weak complaint that’s founded on questionable data, selective history, and anecdotal statistics. Two weeks ago we wrote a note comparing the DoJ’s failure to block the Oracle acquisition of PeopleSoft to the current complaint against AMR/LCC. We compared themes from the Judge’s opinion in O/PS to this DoJ complaint and concluded that DoJ is likely to lose AMR/LCC because DoJ seems to be repeating similar mistakes. We received good feedback on that note, including valuable constructive criticism from antitrust attorneys." In my opinion, Hunter is one of the brightest and most strategic thinking airline analysts in the industry."[/background]
[background=rgb(250, 250, 250)]2. The WSJ reported in a statement tonight, "the two airlines said Tuesday that they continue to work closely with the creditors committee on all key matters, including the Justice Department litigation."[/background]
[background=rgb(250, 250, 250)]3. The WSJ also reported,"the airlines could pursue a settlement that may assuage the Justice Department’s concerns. It isn’t known whether those negotiations are under way. Often concessions aren’t reached until the eve of an antitrust trial."[/background][/background]
