US Airways cancels Delta acquisition

[Miesian Corners]

Don't forget Air Canada and Lufthansa.

[A2]

This deal might have some more hurdles to jump through just yet. SC legislators are now opposing the deal.

http://www.charlotte.com/mld/charlotte/business/16490893.htm

A2

[uptownliving]

Delta is on a campaign to make sure this merger doesn't happen and it sounds like these legislators have bought into what Delta has to say. The bottom line is that these legislators have as much say on the merger as Average Joe and Jane. In otherwords its a bunch of hot air.

[BobbyRobert]

from the Wall Street Journal (tomorow's print edition)

fter digging into the details of the US Airways offer -- which was sweetened 20% less than two weeks ago -- and hiring former Continental Airlines Inc. Chairman Gordon Bethune to help analyze its prospects, the Delta creditors' committee has grown skeptical of the proposed merger, these people said.

[A2]

IMO, this is GREAT news. We still must see how it all shakes out, but this is looking more and more like a deal that is NOT going to happen.

Thanks for posting it BobbyRobbert.

A2

[monsoon]

It will be the creditors and the bankrupcy judge that will decide what happens. Delta management has also included the revised USA offer in their bankruptcy filing with the court. A good sign of how this will go, one way or the other will occur by Feb 1. USA has placed conditions on the creditors and if they don't meet them, then they said they will revoke their offer on that date. If this happens then no deal. If the creditors do comply with USA then its most likely going to happen. That is in 9 days for anyone that is interested.

[A2]

It will be the creditors and the bankrupcy judge that will decide what happens. Delta management has also included the revised USA offer in their bankruptcy filing with the court. A good sign of how this will go, one way or the other will occur by Feb 1. USA has placed conditions on the creditors and if they don't meet them, then they said they will revoke their offer on that date. If this happens then no deal. If the creditors do comply with USA then its most likely going to happen. That is in 9 days for anyone that is interested.

[kickazzz2000]

Interesting article from todays Atlanta paper regarding the proposed deal losing steam. They mention the possibility of Parker having to up the ante yet again, which makes one wonder, how much debt would you saddle yourself with to run this newly merged company? This is the some of the investor's main objections to the deal.

Basically, an 8B offer not enough, 12+B offer "too much" (because of the debt it would create).

http://www.ajc.com/business/content/busine...23bizdelta.html

[A2]

Interesting article from todays Atlanta paper regarding the proposed deal losing steam. They mention the possibility of Parker having to up the ante yet again, which makes one wonder, how much debt would you saddle yourself with to run this newly merged company? This is the some of the investor's main objections to the deal.

Basically, an 8B offer not enough, 12+B offer "too much" (because of the debt it would create).

http://www.ajc.com/business/content/busine...23bizdelta.html

[monsoon]

It's being reported that Delta is going to ask USA to extend it's Feb. 1 deadline so it has more time to study the new offer.

[monsoon]

It's down to crunch time with the creditors. Apparently USAir has said it will throw in another $billion if the creditors will accept its terms this week.

[JerseyBoy]

It's down to crunch time with the creditors. Apparently USAir has said it will throw in another $billion if the creditors will accept its terms this week.

[monsoon]

Good gracious, do they really have all this amount of money to back this deal up considering they were considered bankrupt only a couple of years ago?

[uptownliving]

Good gracious, do they really have all this amount of money to back this deal up considering they were considered bankrupt only a couple of years ago?

[BobbyRobert]

The plot thickens..... (from tonight's Observer web site)

"PHOENIX - US Airways Group Inc. on Monday denied reports it offered to add $1 billion in cash to its $9.87 billion cash-and-stock bid for Delta Air Lines Inc. in order to win support from its creditors.

"We have not raised our bid," US Airways spokesman Phil Gee said. "The previous offer is still on the table and is set to expire Feb. 1.""

Things are getting weirder and weirder

its all here:

http://www.charlotte.com/mld/charlotte/new...ws/16574847.htm

[SmellyCat]

Bloomberg just announced that USAir withdrew it's $9.75 million offer for Delta after Delta's creditors declined to let the bid move forward.

[turbocraig]

But, like I said, I don't think this will get to far off the ground (pun intended).

[SmellyCat]

I hear champagne corks popping in ATL, CLT and anywhere there are consumers who don't want higher airfares.

[dubone]

Here is the O article: http://www.charlotte.com/mld/charlotte/business/16589088.htm .

What a RELIEF. I was really believing that that merger would have really crippled Charlotte's air connectivity. Hopefully they will now pursue some better merger candidates with less overlap.

[atlrvr]

Well Northwest was interested in Delta, maybe NW will also talk to US. I don't care who buys who, but my guess is Parker isn't about to let his company get bought.

[monsoon]

Now Delta has to put up its money to pay the checks that it has written with it's mouth. That is he has to exit from bankruptcy and if what USAir said was correct about Delta, in that it's bankruptcy plan was unrealistic, then USA might be back to buy up the assets. USA did exactly the same thing and was close to being liquidated, when US West stepped in and bought them up.

This doesn't change the fact that the US Air industry does not need two large hubs sitting right beside each other pretty much serving the same routes. One will end up going and my money is on Atlanta being the one surviving. Charlotte has dodged the bullet at the moment but the war isn't over with.

IMO a merger with Delta would have been better for Charlotte than the USA monopoly that exists there today.

[turbocraig]

Routing-wise, a US/NW link-up makes a lot more sense than this US/DL mess ever did. US is strong on both coasts (post AmWest merger) and NW is strong in the midwest/northwest, where US is weak. US has Europe and the Caribbean covered and NW has lots of service to Asia. It all fits together quite nicely, actually.

[SmellyCat]

Now Delta has to put up its money to pay the checks that it has written with it's mouth. That is he has to exit from bankruptcy and if what USAir said was correct about Delta, in that it's bankruptcy plan was unrealistic, then USA might be back to buy up the assets. USA did exactly the same thing and was close to being liquidated, when US West stepped in and bought them up.

This doesn't change the fact that the US Air industry does not need two large hubs sitting right beside each other pretty much serving the same routes. One will end up going and my money is on Atlanta being the one surviving. Charlotte has dodged the bullet at the moment but the war isn't over with.

IMO a merger with Delta would have been better for Charlotte than the USA monopoly that exists there today.

[monsoon]

....

Why Atlanta and Charlotte can't co-exist as hubs of two different airlines, I'm not sure I understand. Aren't Houston and Dallas both hubs? New York and Philadelphia?

[turbocraig]

Actually they probably will need those hubs. I can't imagine the volume of Bush/InterContinental and Dallas-Ft Worth if they were to combine. There are just too many people flying in too many planes for one airport like that to handle. Both those airports have lots of origin/destination travel, so they're going to be behemoth airports anyway, but the only situation where one of those may go away as a hub were if American (DFW hub) and Continental (IAH hub) were to merge. Anything is possible, but I don't foresee an AA/CO marriage. Too much overlap just like the failed US/DL deal.