USairways ups the offer for Delta

[pit_needs_help]

http://news.yahoo.com/s/ap/20070110/ap_on_...ta_us_airways_1

 

[Alice Cramden]

http://news.yahoo.com/s/ap/20070110/ap_on_...ta_us_airways_1

...Last week, Delta rejected the bid and presented a stand-alone plan that it says values it at $9.4 billion to $12 billion, topping US Airways' $8.3 billion offer...

Guess Parker did some more math and decided DAL was correct with it's own valuation.

Alice Cramden

 

[NYCDelta]

http://news.yahoo.com/s/ap/20070110/ap_on_...ta_us_airways_1

Why would he up the offer if he thought the company was already overvalued? Could there be other developments we don't know about? Isn't Bethune meeting this week with all the parties? Curious.

 

[furloughednow psa]

With this offer we should all start getting along. Its looking more and more like this is a done deal.

 

[Alice Cramden]

Why would he up the offer if he thought the company was already overvalued? Could there be other developments we don't know about? Isn't Bethune meeting this week with all the parties? Curious.

Parker was negotiating...it's like buying a car. Start low and meet somewhere in the middle. Why pay full price?

My concern is the debt load IF this deal goes through. The merger could mean BKIII.

DOJ-there is no anti trust concerns because they are all over lapping routes. However, that would leave other air carriers to merge that would have big monopolies. If that happens, LCC and DAL results of their merger will be left "flapping in the wind" and could be looking at BK...again!

Alice Cramden

 

[WNrforlife]

...Last week, Delta rejected the bid and presented a stand-alone plan that it says values it at $9.4 billion to $12 billion, topping US Airways' $8.3 billion offer...

Guess Parker did some more math and decided DAL was correct with it's own valuation.

Alice Cramden

Just goes to show that you can't trust a thing Parker says.
Especially "no furloughs".

He's writing checks with his ego and will put the New Delta into bankruptcy in no time. :down: :down:

 

[aislehopper]

see also Another Article

From the article.

. . . US Airways said the increased offer is set to expire on Feb. 1 unless creditors indicate support for the start of the due diligence process, which would open up Delta's books to US Airways. . . .

. . . Parker said "the offer would go away in its entirety" if those conditions were not met. . . .

"There's an offer on the table now and it would expire," Parker said.

It sounds like our management has to play a delaying game, and Dougie will take his marbles and go home.

ah

 

[gaucho99]

...Last week, Delta rejected the bid and presented a stand-alone plan that it says values it at $9.4 billion to $12 billion, topping US Airways' $8.3 billion offer...

Guess Parker did some more math and decided DAL was correct with it's own valuation.

Alice Cramden

No, if you read the article closely, it states the new bid is worth about 10.3 billion but if you do the math the way DL does math, then it is worth 12.7 to 15.4 billion. Doug does not agree with DL's math but he's applying the same methodology when he quotes that amount for comparison purposes.

Another quote out today:

This would seem to be an irresistible offer," airline consultant Robert Mann said. "I think Delta's stuck. I think they've kind of cornered themselves

 

[FW190]

No, if you read the article closely, it states the new bid is worth about 10.3 billion but if you do the math the way DL does math, then it is worth 12.7 to 15.4 billion. Doug does not agree with DL's math but he's applying the same methodology when he quotes that amount for comparison purposes.

Another quote out today:

This would seem to be an irresistible offer," airline consultant Robert Mann said. "I think Delta's stuck. I think they've kind of cornered themselves

Now that it seems Delta will eventually be acquired does this mean the company will become open to talking with a more desirable partner like United?

 

[luv2fly]

Now that it seems Delta will eventually be acquired does this mean the company will become open to talking with a more desirable partner like United?

I think that has been a possibility all along. It had been reported that United told Delta they were willing to talk if Delta felt it could not fend off the US bid.
I would bet that those talks take place shortly.

 

[FW190]

I think that has been a possibility all along. It had been reported that United told Delta they were willing to talk if Delta felt it could not fend off the US bid.
I would bet that those talks take place shortly.

And the question would then become does United think Delta is worth shelling out in the neighborhood of $10 billion. And if not United or another airline individually buying Delta does a private equity sponsored deal take place.

In any case, unless the DOJ kills the deal it looks like Delta will not survive on its own.

 

[BoeingBoy]

No, if you read the article closely, it states the new bid is worth about 10.3 billion but if you do the math the way DL does math, then it is worth 12.7 to 15.4 billion. Doug does not agree with DL's math but he's applying the same methodology when he quotes that amount for comparison purposes.

Actually, gaucho is correct - this new offer clearly says that the DL valuation was correct. After all, at the end of the day, a company is worth what a willing buyer (US certainnly meets that criteria) is willing to pay ($10+ billion). Since DL's POR said they would be worth $9.4 - $12 billion, US' offer just validated that.

Jim

 

[FW190]

Actually, gaucho is correct - this new offer clearly says that the DL valuation was correct. After all, at the end of the day, a company is worth what a willing buyer (US certainnly meets that criteria) is willing to pay ($10+ billion). Since DL's POR said they would be worth $9.4 - $12 billion, US' offer just validated that.

Jim

Your point is well taken, however, I don't think this means the intrinsic value (justified by the ability to generate future free operating cash flows) of Delta is nearly as high as either US Airways or Delta is projecting.

 

[phasersonstun2]

My concern is the debt load IF this deal goes through. The merger could mean BKIII.
If that happens, LCC and DAL results of their merger will be left "flapping in the wind" and could be looking at BK...again!

Alice Cramden

Sounds like a B movie title:

BKIII... this time it's for real!

 

[BoeingBoy]

Your point is well taken, however, I don't think this means the intrinsic value (justified by the ability to generate future free operating cash flows) of Delta is nearly as high as either US Airways or Delta is projecting.

And that is something that we'll never know for one of the two valuations since one will never be tested in the marketplace.

Currently, anyone can point to supposed fallacies in DL's financial projections, but US hasn't put any projections out for public scruntiny and almost surely won't until a POR based on the merger is put forward. Only then will we know what projections were used or how realistic they seem.

To borrow a phrase from Parker, though, will the "new DL" really be worth almost as much as AA, UA, & CO combined? At $15.4 billion, that's what Parker is claiming.

Jim