UAL may make a bid for CAL

[a320av8r]

From CBS Marketwatch:

"Shares of Continental (CAL) climbed by nearly 8% after Benchmark Co. analyst Helane Becker suggested UAL Corp. (UAUA) could launch a bid for Delta Air Lines Inc. (DALRQ) or announce a merger with Continental.

UAL, United Airline's parent company, is scheduled to make an investor presentation Tuesday, and the company's executives have made no secret of United's desire to play a part in industry consolidation."

 

[etops1]

any news?

 

[JungleClone]

I would think it would be the other way around, with CO acquiring UA. That would get them around the NW Golden Share provision. Also, Wall Street has more confidence in CO's Senior Mgmt than it does UA's. I feel it's only a matter of time before a CO/UA combination is announced.

 

[Baja4U]

I would think it would be the other way around, with CO acquiring UA. That would get them around the NW Golden Share provision. Also, Wall Street has more confidence in CO's Senior Mgmt than it does UA's. I feel it's only a matter of time before a CO/UA combination is announced.

Continental doesn't need any UA cancer, but u may be correct?! :down:

 

[flyhigh]

JungleClone,

I'm pretty sure that the NW provision works both ways (CO as a buyer).

 

[Cosmo]

I would think it would be the other way around, with CO acquiring UA. That would get them around the NW Golden Share provision.

If Northwest's current shares are cancelled as part of its POR, which is a virtual certainty, then I believe that, by definition, a change of control at Northwest will have occurred and thus trigger a provision eliminating the "Golden Share". At that point, United could acquire or merge with Continental without any worry about Northwest interfering with the transaction. And with United being the successor company (regardless of who actually runs it or where the headquarters is located), potential issues surrounding LHR access and NRT beyond rights go away and avoid the necessity of protracted and potentially unsuccessful governmental negotiations with the U.K. and Japan, respectively, to retain such access and rights for the merged carrier.

 

[ZMAN777]

FWIW,
The New York Times just released this article at 9:00 PM. I'm guessing there'll be more tomorrow. Not many details as to how far along the talks have proceeded, scope of the merger/acquisition, etc. Having fun now!!

Cheers,
Z B)




http://yahoo.reuters.com/news/articleinves...1-CompanyNews-2

 

[Nor'Easta]

United and Continental in merger talks


United Air, Continental in Merger Talks, People Say (Update7)

By ************************

Dec. 13 (*********) -- UAL Corp.'s United Airlines and Continental Airlines Inc. are discussing a merger as industry consolidation accelerates, two people familiar with the talks said.

The discussions follow US Airways Group Inc.'s hostile $8.67 billion offer for Delta Air Lines Inc. on Nov. 15. Low- cost carrier AirTran Holdings Inc. said today it offered $290 million for Midwest Air Group Inc.

A United-Continental merger would combine the second- and fourth-largest U.S. airlines in terms of passenger traffic, eclipsing AMR Corp.'s American Airlines to become the world's largest carrier. Airlines are consolidating as they recover from a 33 percent drop in travel after the Sept. 11 terror attacks.

``We don't need six legacy network carriers in this country,'' said Alan Sbarra of San Francisco-based Roach & Sbarra Consulting. ``We're going to consolidate possibly down to three or four.''...

 

[WNrforlife]

[quote name='Nor'Easta' post='437705' date='Dec 13 2006, 07:58 AM']United and Continental in merger talks
United Air, Continental in Merger Talks, People Say (Update7)

By ************************

Dec. 13 (*********) -- UAL Corp.'s United Airlines and Continental Airlines Inc. are discussing a merger as industry consolidation accelerates, two people familiar with the talks said.

The discussions follow US Airways Group Inc.'s hostile $8.67 billion offer for Delta Air Lines Inc. on Nov. 15. Low- cost carrier AirTran Holdings Inc. said today it offered $290 million for Midwest Air Group Inc.

A United-Continental merger would combine the second- and fourth-largest U.S. airlines in terms of passenger traffic, eclipsing AMR Corp.'s American Airlines to become the world's largest carrier. Airlines are consolidating as they recover from a 33 percent drop in travel after the Sept. 11 terror attacks.

``We don't need six legacy network carriers in this country,'' said Alan Sbarra of San Francisco-based Roach & Sbarra Consulting. ``We're going to consolidate possibly down to three or four.''...[/quote]

This is gonna get interesting!!!!

 

[Gilding the Lily]

If Northwest's current shares are cancelled as part of its POR, which is a virtual certainty, then I believe that, by definition, a change of control at Northwest will have occurred and thus trigger a provision eliminating the "Golden Share". At that point, United could acquire or merge with Continental without any worry about Northwest interfering with the transaction. And with United being the successor company (regardless of who actually runs it or where the headquarters is located), potential issues surrounding LHR access and NRT beyond rights go away and avoid the necessity of protracted and potentially unsuccessful governmental negotiations with the U.K. and Japan, respectively, to retain such access and rights for the merged carrier.

Cosmo,

As I mentioned in another thread, I believe that NW holds the "Golden Share" IN Continental. Thus, any plan of reorganization that "cancels" or "alters" NW's current stock will not affect the "golden share," as the "golden share" is a share of Continental, not NW.

 

[ThirdSeatHero]

Cosmo,

As I mentioned in another thread, I believe that NW holds the "Golden Share" IN Continental. Thus, any plan of reorganization that "cancels" or "alters" NW's current stock will not affect the "golden share," as the "golden share" is a share of Continental, not NW.

Just a point of clarification on this issue.

Section 4: Master Alliance Agreement

iii Additional Termination Rights

(a) In the event of a NW Change of Control, each of CO and NW shall have the right to terminate the Master Alliance Agreement on 6 months' prior written notice, without liability or penalty to the other party.


(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.

It would seem that with NWA in bankruptcy, the "Change of Control" provisions have been met.

 

[Redbone]

Just a point of clarification on this issue.
It would seem that with NWA in bankruptcy, the "Change of Control" provisions have been met.

Obviously not since it is still referred to in both companies 10Ks.

 

[ThirdSeatHero]

Obviously not since it is still referred to in both companies 10Ks.

Time will tell. NWA is in reorganization thus the provision is met. Perhaps CAL simply hasn't filed the 6 months notice yet.

 

[Gilding the Lily]

Just a point of clarification on this issue.
It would seem that with NWA in bankruptcy, the "Change of Control" provisions have been met.


(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.

Not trying to be technical... but I always assumed that the words "involving a third-party," qualified the language regarding reorganization. This would explain why the media services keep talking about the "golden share."

 

[ThirdSeatHero]

Not trying to be technical... but I always assumed that the words "involving a third-party," qualified the language regarding reorganization. This would explain why the media services keep talking about the "golden share."

Well if you're not trying to be technical try focusing the words "or", "or", "or". you'll notice it puts it into context.

Section 4: Master Alliance Agreement

iii Additional Termination Rights

(a) In the event of a NW Change of Control, each of CO and NW shall have the right to terminate the Master Alliance Agreement on 6 months' prior written notice, without liability or penalty to the other party.


(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.