Report: US Airways Sweetens Delta Deal
US Airways Group Inc. offered to add $1 billion in cash to its $9.67 billion cash-and-stock bid for fellow airline Delta Air Lines Inc. in order to win support from Delta's creditors, The Wall Street Journal reported Monday.
Citing people familiar with the matter, the newspaper said Tempe, Ariz.-based US Airways would raise its bid if Delta's creditors, who have the most say in the bankruptcy-protected airline's fate, agreed to postpone a Feb. 7 hearing on restructuring the carrier.
US Airways has been seeking postponement of that hearing, and has threatened to withdraw its bid if the reorganization hearing isn't delayed by Thursday.
In November, US Airways launched a hostile takeover effort to buy Atlanta-based Delta, which is under bankruptcy court protection from creditors. A committee representing creditors hasn't said anything publicly since US Airways sweetened its offer earlier this month.
Previously, the committee supported letting Delta reorganize and emerge from bankruptcy protection as a stand-alone company.
The Journal said some of Delta's creditors not on the committee approached US Airways late Friday, suggesting US Airways up its bid by more than $2 billion. It isn't known whether the increased bid has swayed any creditors on the committee, the newspaper said.
On Friday, the Georgia state senate voiced unanimous opposition to the takeover bid, saying the state's largest employer deserves a chance to exit bankruptcy as an independent company.
Delta, which reeled financially after the Sept. 11, 2001 terror attacks, filed for Chapter 11 bankruptcy in 2005, reporting a $2 billion loss.
The resolution, which passed 52-0, said Delta is on pace to exit bankruptcy in the first half of this year and that it's in the best interest of the company's employees, and other Georgians, for it to remain independent.
A copy of the resolution was sent to Delta and to U.S. Attorney General Alberto Gonzales, who would have to sign off on any takeover effort by US Airways.
"The good news is that we're doing all that we can," said Sen. Chip Pearson, R-Dawsonville, chairman of the Senate's Economic Development committee. "The bad news is we can't do everything."
Last week, Georgia's legislative leaders signed a letter urging the Justice Department to reject the takeover bid.
The lawmakers said in the letter that a merger between Delta and US Airways would result in skyrocketing air fares and reduced competition.
The nation's third-largest airline, Delta has reached out to Atlanta's business and civic leaders and organized public rallies to protest the takeover bid launched by its archrival in November 2006.
"(T)he members of this body stand in opposition to any unsolicited takeover or merger attempt from anyone that may diminish the importance of Delta as a major employer and corporate headquarters in Georgia," the resolution reads.