Merger odds...

[delta777]

My purely uneducated guess puts the chances of a successful merger (hostile takeover attempt) between LCC and DAL at less than 30% at this stage of the game.

Based purely on Bethune's comments about the Official Creditors Committee being difficult to come to any sort of concensus and the fact that there are no more meetings planned.

Not to mention the looming Feb. 1 deadline and no word of "due diligence" having been granted to LCC. You could almost hear a pin drop in Tempe right about now.

I have to admit, even i was surprised that due diligence wasn't granted after the revised offer was submitted. I was certain the creditors would at the very least like to get a solid look at all the numbers.

 

[bigbusdrvr]

My purely uneducated guess puts the chances of a successful merger (hostile takeover attempt) between LCC and DAL at less than 30% at this stage of the game.

Based purely on Bethune's comments about the Official Creditors Committee being difficult to come to any sort of concensus and the fact that there are no more meetings planned.

Not to mention the looming Feb. 1 deadline and no word of "due diligence" having been granted to LCC. You could almost hear a pin drop in Tempe right about now.

I have to admit, even i was surprised that due diligence wasn't granted after the revised offer was submitted. I was certain the creditors would at the very least like to get a solid look at all the numbers.

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I think you may be right...

Would like to see the merger go through, but they dont ask me...

My guess is your 30% may be on the mark...

Feb 1 we will know, best of luck eitherway!!

 

[USA320Pilot]

I have no idea what the odds are on whether or not the merger will proceed, but it appears that both US Airways and Delta believe the deal could proceed otherwise they would not continue to be lobbying so hard. Delta and DALPA are fighting the merger as much as ever and US Airways continues to intensely pursue the deal so I believe the potential for a "corporate transaction" still exists.

In regard to the government, just today there was news that Charles Schumer apparently believes the merger could proceed or in my opinion he would not have written a letter to Doug Parker.

Meanwhile, according to Rueters, Gordon Bethune said Delta's creditors' interests are so diverse that getting enough of them to back any proposal is "like herding cats."

"They're not all lined up on what's good for each other," Bethune noted.

If that is true, how can the creditors agree on any plan, whether its the standalone or merger plan? Could this be an impediment to Delta's emergence with the creditors "interests are so diverse that getting enough of them to back any proposal (as Bethune indicated)?"

In my opinion, the unsecured creditors committee has not made any decision because of the diverse interests and the sweetened offer appears to have gotten people's attention.

According to Bethune he is "glad to see that the creditors are at least being offered more than they were in the past." Bethune continued, "I know the creditors' committee is looking at that."

Finally, Reuters noted, US Airways' bid, which was increased about 20 percent, keeps them in the game after creditors expressed concerns about the original offer, according to Bethune, who met with creditors and US Airways last week.

See Story

I believe the creditor differences of opinion is why there is relative silence as the group attempts to reach a consensus on whether or not to force "due diligence", and ultimately, whether or not to support the standalone or merger plan.

Regards,

USA320Pilot

 

[phasersonstun2]

This is such a raw deal... would somebody just say yes or no to this thing so we can all go back to being Starbucks swizzling worker bees...

 

[Elevation]

he gives the deal "60-40" odds of happening because Delta's creditor committees will determine what's likely to return the most financial value. "They do math real well. And the judge is likely to go along with the mathematics," Bethune says.

Has he changed his mind since they INCREASED the bid? Don't think so. It's probably 70/30 now. DOJ is the unknown.

Businessweek

 

[Freighterguynow]

If it goes through - fine.
If it falls apart - fine too.

 

[FW190]

My purely uneducated guess puts the chances of a successful merger (hostile takeover attempt) between LCC and DAL at less than 30% at this stage of the game.

Based purely on Bethune's comments about the Official Creditors Committee being difficult to come to any sort of concensus and the fact that there are no more meetings planned.

Not to mention the looming Feb. 1 deadline and no word of "due diligence" having been granted to LCC. You could almost hear a pin drop in Tempe right about now.

I have to admit, even i was surprised that due diligence wasn't granted after the revised offer was submitted. I was certain the creditors would at the very least like to get a solid look at all the numbers.

For what it's worth, I am hearing around DAL HQ that management is very confident the creditors will support the DAL plan and that the creditors don't have a very high opinion of Doug Parker. Perhaps DAL is engaging in wishful thinking but we'll soon know for sure.

 

[Gilding the Lily]

This is such a raw deal... would somebody just say yes or no to this thing so we can all go back to being Starbucks swizzling worker bees...

Phaser,

There may be a significant reason why the creditors are playing "mum is the word" game. As it stands right now, DL still has the exclusive right to file its plan... meaning that nobody else can file a plan, including the Official Unsecured Creditors' Committee.

If they drag this thing out, and are successful in tolling the exclusivity period, the Creditors' Committee will have even more leverage than it has now. And at that time, the Creditors' Committee can file its own Plan of Reorganization, which could, if they so choose, include a post-bankruptcy US/DL merger.

 

[Elevation]

For what it's worth, I am hearing around DAL HQ that management is very confident the creditors will support the DAL plan and that the creditors don't have a very high opinion of Doug Parker. Perhaps DAL is engaging in wishful thinking but we'll soon know for sure.

bottom line it's up to Boeing not DAL. Will the new Delta buy enough Boeing products vs the old Delta order book?

 

[USA320Pilot]

On Tuesday, January 16, Reuters reported that Gordon Bethune said Delta's creditors' interests are so diverse that getting enough of them to back any proposal is "like herding cats? and "they're not all lined up on what's good for each other."

Reuters noted Bethune said he doesn't yet have further meetings planned (I assume with Delta, US Airways, or the creditors).

See Story

However, today the Houston Chronicle reported that Bethune would meet with some members of Delta's creditors committee (this) Friday.

See Story

This news raises a couple of questions:

What changed for Bethune to hold talks with some creditors and why do they want to meet?

Is he meeting with creditors who currently support Delta’s standalone plan, US Airways’ merger bid, or people undecided? How will this meeting affect the process?

I believe Boeing is a key figure as chairman of the creditors committee and will play a key role. Boeing could support the merger in exchange for US Airways and Delta updating their fleets with B737-800s, B777s, and B787s to replace the aging B737s, B767s, and A330s. Furthermore, I believe Gilding the Lily’s comment that “there may be a significant reason why the creditors are playing "mum is the word" game. As it stands right now, DL still has the exclusive right to file its plan... meaning that nobody else can file a plan, including the Official Unsecured Creditors' Committee. If they drag this thing out, and are successful in tolling the exclusivity period, the Creditors' Committee will have even more leverage than it has now. And at that time, the Creditors' Committee can file its own Plan of Reorganization, which could, if they so choose, include a post-bankruptcy US/DL merger,â€￾ which is a valid and interesting point.

Regards,

USA320Pilot

 

[Elevation]

Once Boeing flips it's a done deal. All the short term debt holders will jump on the deal e.g. Hedge funds, Banks. The long term debt holders are holding out e.g. Boeing, ALPA, AMEX. Alpa won't flip, AMEX probably won't due to CitiBank being the new card provider, Boeing is the key. On a side note a middle manager in Citi Group said to me "that the new advertising and promotion look for the "New Delta" is under way" fwiw.

 

[FW190]

Once Boeing flips it's a done deal. All the short term debt holders will jump on the deal e.g. Hedge funds, Banks. The long term debt holders are holding out e.g. Boeing, ALPA, AMEX. Alpa won't flip, AMEX probably won't due to CitiBank being the new card provider, Boeing is the key. On a side note a middle manager in Citi Group said to me "that the new advertising and promotion look for the "New Delta" is under way" fwiw.

Seems US Airways would offer Boeing anything they want in terms of future commitments to get the deal approved. However, Delta has an exclusive contract with Boeing and has for years so I suspect Delta is doing the same thing.

The creditors appear to benefit by keeping propects of a deal alive as long as possible in order to extract the most value from both the Delta and US Airways plans. Why wouldn't the creditors approve to go forward by February 1?

 

[AstroLounge]

I'll believe IT only when I SEE IT! (And then I still won't see any good in it for either side) Delta is a very proud airline that has been around A LONG TIME........and if it requires enlisting the help of General Robert E. Lee those damn Yankees (or Desert Dwelling Armadillos) are NOT doing to get Scarletts' Delta!. 😛

 

[Elevation]

I'll believe IT only when I SEE IT! (And then I still won't see any good in it for either side) Delta is a very proud airline that has been around A LONG TIME........and if it requires enlisting the help of General Robert E. Lee those damn Yankees (or Desert Dwelling Armadillos) are NOT doing to get Scarletts' Delta!. 😛

Great a failed General and a slave owner...great combo to save the day.

 

[flyhigh]

FW190,

Technically, Delta does not have an exclusive with Boeing. Boeing had to release AA/CO/DL from that clause as part of their merger with McDonnell Douglas per the Europeans.