Delta rejects US Airways takeover bid
Kerry Ezard (19Dec06, 12:55
GMT, 219 words)
Delta Air Lines’ board of directors has unanimously rejected US Airways’ takeover bid, and the US major plans to emerge from Chapter 11 bankruptcy protection as a standalone carrier in spring 2007.
Delta, which today submitted its plan of reorganisation to the bankruptcy court, says it has concluded that its own plan will provide the carrier’s creditors with “superior value” and “greater certainty” than US Airways’ takeover proposal.
“Our plan for a fundamentally new and different airline is working and is creating real value,” says Delta
CEO Jerry Grinstein. “We will emerge as a thoroughly new Delta that will be a strong global carrier with a solid foundation for profitable growth in a highly-competitive environment.”
Grinstein adds that US Airways’ proposal is “structurally flawed” and stands little chance of clearing antitrust hurdles.
“For these reasons, Delta’s board of directors has unanimously rejected the proposed transaction,” he notes. “Instead, we will continue to focus on creating value by building an airline that combines a right-sized domestic network and a profitable and expanding international presence with a best-in-class network cost structure and strong balance sheet.”
US Airways on 15 November made a formal merger proposal to Delta, under which it offered to invest $8 billion in cash and stock to combine the two carriers and operate under the Delta brand name.
Source: Air Transport Intelligence news