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Delta Buyout Being Reported  
User currently offlineDeltaAir From United States of America, joined May 1999, 1094 posts, RR: 0
Posted (14 years 2 weeks 4 days 6 hours ago) and read 1534 times:

Delta Air Lines Inc., the third-largest U.S. carrier, is a possible buyout target at a price of $61 a share in cash, Business Week reported in its ``Inside Wall Street'' column.

A buyout group and two former airline executives are preparing to make a cash bid of $7.5 billion for Delta, the magazine said, citing unidentified ``industry insiders.'' The buyout group has been talking with a couple of banks to secure financing for the transaction, the magazine said.

``It's a speculative story and we really can't comment on rumors,'' said Delta spokesman Russ Williams. The company's shares, which fell 50 cents to 45.25 today, have fallen 14 percent over the past year.

Delta and other major airlines engaged in acquisition discussions following a May 24 announcement from UAL Corp., parent to United Airlines, that it agreed to buy US Airways Group Inc. for $11.6 billion. Subsequently, Delta Chief Executive Leo Mullin said his airline has studied the possibility of buying Continental Airlines Inc., which it also pursued three years ago.

Meanwhile, some airline executives, including those at Continental, have suggested airline stocks are so cheap it might be the right time for taking an airline private. Most of the stocks in the group are trading at less than 8 times earnings.

UAL agreed to pay $60 a share for US Airways, or more than twice the value of the shares on the day before the acquisition proposal was announced. US Airways shares closed at 31.38 today because of investor concerns about securing government approvals for the proposed merger.

Based on earnings and assets, Delta shares could rise to $83 in a year, Business Week said, citing Deutsche Banc Alex. Brown analyst Susan Donofrio. Atlanta-based Delta has a price-earnings ratio of 5.3, based on an estimated $8 a share in earnings in the year ending June 30, 2001, the magazine said.

Mullin told analysts last week at a breakfast meeting that Delta ``is ready to be aggressive with its own merger proposals, should this prove necessary,'' according to a report from Donofrio.

Leveraged buyouts in the airline industry have been very difficult in the past and only one at Northwest Airlines Corp. was successful because that company, unlike other airlines, had very little debt, said CIBC Oppenheimer analyst Julius Maldutis. It would be difficult to raise funds for an airline transaction of that size, he said.


14 replies: All unread, jump to last
 
User currently offlineN312RC From United States of America, joined Aug 2000, 2682 posts, RR: 16
Reply 1, posted (14 years 2 weeks 4 days 6 hours ago) and read 1352 times:

two former airline executives

Say your prayers that it isnt good ol' Frank from Texas Air.



Fly Delta's Big Jets!
User currently offlineHypermike From United States of America, joined Dec 1999, 1001 posts, RR: 5
Reply 2, posted (14 years 2 weeks 4 days 6 hours ago) and read 1352 times:

Lorenzo is dead.

The beauty of this is that since its not one carrier buying another, there's no speculation of whether or not the DOJ will let it happen.  


User currently offlineExusair From United States of America, joined Sep 2000, 684 posts, RR: 0
Reply 3, posted (14 years 2 weeks 4 days 5 hours ago) and read 1334 times:

I recall when the DL Board of Directors was looking for a replacement for Ron Allen and Hollis Harris name was on the pilots union wish list. Harris is a former DL executive and past CEO of Continental Airlines (among others), and I wonder if he has anything to do with this deal. I just hope that it is an airline person who comes in and not some number cruncher types who screw the employees of DL.

User currently offlineB757300 From United States of America, joined Dec 2000, 4114 posts, RR: 23
Reply 4, posted (14 years 2 weeks 4 days 5 hours ago) and read 1308 times:

So when did Lorenzo die, or is he just "dead" in the airline industry?


"There is no victory at bargain basement prices."
User currently offlineJetdude From United States of America, joined Nov 2006, 81 posts, RR: 0
Reply 5, posted (14 years 2 weeks 4 days 4 hours ago) and read 1302 times:

him and hoffa**

User currently offlineDarrell From United States of America, joined Jul 1999, 236 posts, RR: 0
Reply 6, posted (14 years 2 weeks 4 days 3 hours ago) and read 1286 times:

This is a long shot i know, but maybe the new owners will have the common sense to keep Delta's international operations at PDX alive!


those who have no vices have very few virtues
User currently offlineNotdownnlocked From United States of America, joined Sep 2000, 943 posts, RR: 1
Reply 7, posted (14 years 2 weeks 4 days 1 hour ago) and read 1245 times:

AMEN!!!

User currently offlineLucifer 666 From , joined Dec 1969, posts, RR:
Reply 8, posted (14 years 2 weeks 4 days ago) and read 1263 times:

I'm very much alive.

 


User currently offlineCritter From United States of America, joined Jan 2000, 267 posts, RR: 2
Reply 9, posted (14 years 2 weeks 3 days 21 hours ago) and read 1229 times:

I heard that it was Lewis Jordan of Valujet fame? Now wouldn't that be a collective kick in the rear for the all "high and mighty" Delta to be bought out by their biggest nemesis?..........I really think that Lewis could turn that rag tag bunch around.

long live the critter


User currently offlineBNE From Australia, joined Mar 2000, 3187 posts, RR: 12
Reply 10, posted (14 years 2 weeks 3 days 20 hours ago) and read 1211 times:

Save up your pennies and go and buy some Delta shares which are trading around $45.00. Even if the sale comes does not come of they have been as high as $58.00 so there is some chance that they could go back up. High fuel prices I think are keeping them down.



Why fly non stop when you can connect
User currently offlineNotdownnlocked From United States of America, joined Sep 2000, 943 posts, RR: 1
Reply 11, posted (14 years 2 weeks 3 days 20 hours ago) and read 1204 times:

Are you willing to reveal your sources? If your psychologist mentions that it's all in your head please don't bother to mention it!!!.

Thanks anyway.
J.


User currently offlineWorldTraveller From Germany, joined Jun 1999, 624 posts, RR: 5
Reply 12, posted (14 years 2 weeks 3 days 20 hours ago) and read 1208 times:

People, please have a look at the the userprofile of Lucifer 666!  

Hmmmm...

Regards
the WorldTraveller


User currently offlineFlashmeister From United States of America, joined Apr 2000, 2900 posts, RR: 6
Reply 13, posted (14 years 2 weeks 3 days 17 hours ago) and read 1156 times:
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Here's a link to the story from Business Week: http://biz.yahoo.com/rf/001005/n05569584.html

There's also word that DL and UA may need to start buying stakes in AeroMexico and Mexicana, respectively, to protect their interests there... the story is at http://biz.yahoo.com/rf/001005/n0576188.html.

This could get very interesting... DL has always been known as a cash-driven, line, so taking it private could only reinforce that philosophy...

I'd love to see DL be taken private, and then have that new private group go after AS, so that finally, DL would have a west-coast strategy that made some sense.


User currently offlineDeltaAir From United States of America, joined May 1999, 1094 posts, RR: 0
Reply 14, posted (14 years 2 weeks 3 days 13 hours ago) and read 1077 times:

......It appears that there is some truth to the reports from Business Week. From what I've been reading and gathering there is a certain plan to the madness that is taking place. When and if the 2 unknown buyers come to an agreement DL stock would no longer trade on the stock exchange. All owners at that time will remain owners for life, I believe. It would mean more profits and probably better service to the public. The pilots have always supported going private as benefits are more numerous to them, that is atleast with certain companies.

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