Well, besides the many other posts already answering this, I'll give it another go.
First though, when you refer to dubious valuations, keep in mind that Parker is using two hard facs whereas Delta's POR is mere educated guessing. Parker has a loan set up from a bank (real money) and US stock (currently being traded on a stock exchange thus it has an assigned value). Delta is saying that based on the cuts they've made and yld/traffic projections, they should generate certain financials (revenue, profit, costs, etc.). If all that happens, over the next few years, their stock should be valued around $X. Which is more dubious???
As for the merits of the merger...everyone keeps saying that you should only with a partner who can offer something completely new, like HP/US where US had no West and HP no East. Well, there's a couple points to make here. First, this is a one-sided deal. It's not as much a merger as it is a takeover. Second, when you leave the airline industry, this is simply not what you typically see in mergers. I like to use Exxon/Mobil as an example. When they merged, they actually closed refineries to confine supply and thus help in raising prices.
In this case US is looking at a weakened competitor that has access to two of the three major int'l regions, Latin & Atlantic. Both bring issues. Atlantic has a lot of capacity right now. Even though US is expanding here, there is limited opportunity to continue to do so. Markets will soon become saturated with supply and US is running out of planes. With Latin, there are a lot of bilatterals thatgovern access. It would take forever for US to get access only to be #4 in just about every market behind AA/CO/DL. See United for the outcome of that effort. So, US is attempting to overcome this issue by selling off duplicative assetts for the ability to get access to new revenue generators.
