USAirways to buy (merge) with Delta

[Gilding the Lily]

Actually, US has lined up over $7B in financing to refinance all the DIP loans, so there will be no issue at all with the DIP banks.

Given that at risk Delta debt soared about 20% yesterday, it seems that the market is saying that the US offer is quite a bit better than "go it alone." While DL management has a lot of ways to be difficult in the BK process, I don't see how they prevail on a stand alone strategy when the market (and therefore the creditors) clearly think they will do better with the merger. Not to mention that US stock soared as well, making the equity portion of the deal worth more.

I suspect that DL management is flying to Chicago or Dallas to look for a White Knight right now.

Hey, thanks for the info on the DIP financing and refinancing. Do you have a decent link to that info; I believe you, I would just like to get the scoop on that info as well.

With that said, I am a bit surprised that DL would have enough useable assets for US to use as equity to refinance $7B. Most likely, as with other deals of this nature and magnitude, many banks giving DIP financing will also provide the funds to refinance (not really providing funds, just pushing paper, as the funds are already in use). Perhaps they don't have enough assets; but these refinancing banks, like the market, may recognize that DL/US is better than a stand alone DL and are willing to make accomodations.

Regarding the White Knight, I think DL already knows that a so-called White Knight is waiting in Chicago. I think they are a bit apprehensive though, as that White Knight may turn out to be a Dark Knight if you know what I mean.

Honestly, I think DL made US go public with this info so that they can court frantic offers as soon as possible... they only have a few more months before DL loses exclusive control of their bankruptcy plan. Thus, if they want a mid-bankruptcy merger, they need to finalize the plan soon (although they probably have some time extensions coming).

 

[TechBoy]

The $7B Citigroup financing was in the US presentation. Link was posted earlier in the thread.

Parker has proven with HP/US that there are major savings/synergies to be had from consolidation. Wall Street clearly believes him. While DL can draw this out for a while, the compelling economics will cause some deal to go forward. There is going to be a wedding -- the only thing that DL gets to do is choose the groom.

 

[eolesen]

If the DOJ is able to demand slot divestiture at LGA and DCA, it will all but assure that nobody in Congress will be able to stand in its way, expecially if Airtran and Jetblue wind up being beneficiaries (and as "new entrants" they and Spirit are the most likely recipients of any slots returned to DOT).

WT, hate to say it, but your worst dreams came true -- DL won't be the acquirer.

 

[UnitedChicago]

Is WT in seclusion or just still typing one of his novels?

 

[Barbell]

Is WT in seclusion or just still typing one of his novels?

Someone should check ATL hospitals to make sure he's still breathing...