USairways ups the offer for Delta

[FW190]

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

I hope the higher valuations are right since I'll be working for the new company at least for a while if Parker is able to get the deal done.

 

[IMisstheAladdinTrays]

I hope the higher valuations are right since I'll be working for the new company at least for a while if Parker is able to get the deal done.

Looks like the deal will be done!

 

[flyhigh]

...don't speak too fast. Looks like Delta is trying to dance with NWA...

http://www.marketwatch.com/News/Story/Stor...o&dist=yhoo

 

[wings396]

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.

Just a bit of insurance that will persuade the creditors to take his side of the deal. Even if DL was overvalued by their numbers, this will make Parkers offer look all that much better to the creditors. If the new numbers come out putting his offer above DL's current value, it will be very difficult to get a majority of DL's creditors to accept the stand alone plan over this one. 😀

 

[FW190]

...don't speak too fast. Looks like Delta is trying to dance with NWA...

http://www.marketwatch.com/News/Story/Stor...o&dist=yhoo

Kind of looks like the last act of a desperate Delta.

 

[luv2fly]

Kind of looks like the last act of a desperate Delta.

It doesn't appear that way at all to me. It appears that DL is going to appease the creditors with the proposal of a merger that actually makes sense. It is more likely that a proposed NW/DL deal would be supported by the Delta pilot group that happens to be one of the biggest unsecured creditors. In addition there would most likely be less scrutiny by the DOJ as there is significantly less route overlap.

 

[FW190]

It doesn't appear that way at all to me. It appears that DL is going to appease the creditors with the proposal of a merger that actually makes sense. It is more likely that a proposed NW/DL deal would be supported by the Delta pilot group that happens to be one of the biggest unsecured creditors. In addition there would most likely be less scrutiny by the DOJ as there is significantly less route overlap.

NW may be a more logical merger partner but releasing this news today sounds like Delta is running out of reasons to resist the merger. Is Delta providing any financial data to show the value of a DAL/NW combination to the creditors? If not, it's not something the creditors will be able to assign much weight to in their final decision. However, I'm sure Gordon will provide some key advice here.

And why NW...if Delta is going to partner up, choose the best options i.e. UAL or CAL. I think at least one of the reasons is that Delta's management just can't get past the idea of losing their control of the airline.

 

[luv2fly]

Is Delta providing any financial data to show the value of a DAL/NW combination to the creditors? If not, it's not something the creditors will be able to assign much weight to in their final decision.

Really not much different than the proposed "synergies" that Parker has yet to explain. In addition there has been no real scrutinty of US's plan. Add to that the uncertainty of the DOJ process and an unreceptive management team and employee group. All reasons to cause great uncertainty of Parker's proposal.


And why NW...if Delta is going to partner up, choose the best options i.e. UAL or CAL. I think at least one of the reasons is that Delta's management just can't get past the idea of losing their control of the airline.


That seems a bit presumptuous. There has been much speculation on just how successful a proposed US/DL merge would be. More specifically, the 35% route overlap. DL's survivability is enhanced with a NW merge. A US/DL merge offers little gain to DL. In essence, the merge simply eliminates US's biggest competitor which will be scrutinized by the DOJ. A proposed NW/DL merge however, would bring together to extremely complimentary route structures. DL's Atlantic presence and NW's Pacific.

 

[FW190]

It looks like we're talking to United as well although less frequently than with NW. I'd love to see Delta emerge as a standalone entity and be able to control its own destiny. However, I think this possibility is rapidly dwindling and I'm disappointed that we find ourselves in this position. Unfortunately, Delta has been an undermanaged airline for most of the past 20 years and we're now paying the price.

 

[luv2fly]

It looks like we're talking to United as well although less frequently than with NW. I'd love to see Delta emerge as a standalone entity and be able to control its own destiny. However, I think this possibility is rapidly dwindling and I'm disappointed that we find ourselves in this position. Unfortunately, Delta has been an undermanaged airline for most of the past 20 years and we're now paying the price.

Truer words have never been spoken. For the most part we can thank Leo Mullin and Michelle Burns for where we are today.

 

[FM2436]

It looks like we're talking to United as well although less frequently than with NW. I'd love to see Delta emerge as a standalone entity and be able to control its own destiny. However, I think this possibility is rapidly dwindling and I'm disappointed that we find ourselves in this position. Unfortunately, Delta has been an undermanaged airline for most of the past 20 years and we're now paying the price.

"US Airways has committed financing from Citigroup and Morgan Stanley for the proposed transaction for $8.2 billion, representing $5.0 billion to fund the cash portion of the offer and $3.2 billion in refinancing existing obligations at both US Airways and Delta."

Someone correct me if I'm wrong but, wouldn't the fact that US Airways apparently already has committed financing in place, position US Airways' offer above that from any offer and/or merger proposal from United or Northwest? What committed financing does United or Northwest current have in place to pursue either an acquisition of Delta or merger with Delta?

 

[ClueByFour]

"US Airways has committed financing from Citigroup and Morgan Stanley for the proposed transaction for $8.2 billion, representing $5.0 billion to fund the cash portion of the offer and $3.2 billion in refinancing existing obligations at both US Airways and Delta."

Someone correct me if I'm wrong but, wouldn't the fact that US Airways apparently already has committed financing in place, position US Airways' offer above that from any offer and/or merger proposal from United or Northwest? What committed financing does United or Northwest current have in place to pursue either an acquisition of Delta or merger with Delta?

If UAL comes to dance, someone will finance it. Same (maybe) with NW.

The LCC (Parker) play is all about slashing capacity on monopoly routes in the southeast. It's a one trick pony that won't provide long-term value. But the bankers don't care about long-term value.

 

[Redbone]

A NW/DAL combo is twice the value of a Dal/US combo.

Dal/NW will merge...end of story.

 

[dariencc]

<<<A NW/DAL combo is twice the value of a Dal/US combo.>>>

Unless NW is prepared to make a higher offer than LCC, this will mean nothing.


<<<Dal/NW will merge...end of story.>>>

Wow. Will Morgan Stanley have egg on their faces when they read your post!

 

[BottomFeeder]

A NW/DAL combo is twice the value of a Dal/US combo.

Dal/NW will merge...end of story.

That will happen right after the New Delta emerges. Gordo will tell them how to fragment Old Delta first. Then it is on to merger #3 with NWA before they exit from BK.