US Air sweetens bid for Delta

Dan Grech Jan 10, 2007


SCOTT JAGOW: A couple weeks ago, the head of US Airways said he had no intention of offering more money for Delta Airlines. This morning, he offered more money for Delta Airlines. 20 percent more. Delta’s management is emphatically against this takeover. But it’s not really up to Delta’s management. More now from Dan Grech.

DAN GRECH: US Air’s bid this morning: $5 billion in cash and 89.5 million shares in stock. That means the new offer is worth $10.2 billion, nearly $2 billion more than was offered on November 15.

Professor Darryl Jenkins is with Embry Riddle Aeronautical University.

DARRYL JENKINS: Certainly this is a very, very generous offer. It’s in cash and stock so it’s pretty much a liquid offer. And they put a cutoff date on this to help people make up their minds.

The cutoff is February 1.

Because Delta is in bankruptcy, the carrier’s fate is largely out of its own hands. Jenkins says it’s the bondholders who will ultimately decide whether to take US Airways’ bid.

JENKINS: They get more now rather than less later. And I think at a certain point that becomes a very, very easy decision for any creditor.

Delta has one consolation: If the airlines combine, the carrier’s name will stay Delta.

In New York, I’m Dan Grech for Marketplace.

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