Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Why Don't NW Sell CO's Golden Shares?  
User currently offlineC010T3 From Brazil, joined Jul 2006, 3736 posts, RR: 19
Posted (8 years 1 month 1 week 4 days 1 hour ago) and read 2496 times:

I was wondering why NW don't sell their golden shares in CO. They need the cash and I'm sure that there would be many buyers interested. It would be a start for a UA/CO deal for example.

5 replies: All unread, jump to last
 
User currently offlineLincoln From United States of America, joined Nov 2004, 3887 posts, RR: 8
Reply 1, posted (8 years 1 month 1 week 4 days 1 hour ago) and read 2441 times:

Quoting C010T3 (Thread starter):
I was wondering why NW don't sell their golden shares in CO. They need the cash and I'm sure that there would be many buyers interested. It would be a start for a UA/CO deal for example.

I could very well be wrong, but I don't beleive the so-called "golden share" (there's only one) can be transfered; even if it could be I have doubts about how valuable it is (IIRC, it has no intrinsic voting rights of its own and doesn't represent a significant ownership interest -- just the ability to veto a merger/acquisition).

Lincoln



CO Is My Airline of Choice || Baggage Claim is an airline's last chance to disappoint a customer || Next flts in profile
User currently offlineSllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6
Reply 2, posted (8 years 1 month 1 week 4 days ago) and read 2413 times:

Part of the short reason is that NW really needs CO to remain a significant airline. I'm speaking from a route stanpoint, of course.

For example, living out here on the west coast, being able to chose NW *or* CO and receive essentially the same benefits and treatment lets me seamlessly travel across the combined network. Admittedly, if you are an NW customer, there's still some significant incentive (which has gotten higher in recent times) to fly NW metal where possible, but once can still very effectively leverage the value of CO's network as well.

Losing CO as a partner would be a double whammy -- the CO+partner would represent a stronger competitor that CO and a standalone other airline are now, *and* NW would be weakened at the same time. So NW isn't going to be quick to approve anything that hurts them and helps a competitor at the same time.

Steve


User currently offlineFlyHoss From United States of America, joined Feb 2005, 598 posts, RR: 0
Reply 3, posted (8 years 1 month 1 week 4 days ago) and read 2371 times:

Quoting Lincoln (Reply 1):
I could very well be wrong, but I don't beleive the so-called "golden share" (there's only one) can be transfered; even if it could be I have doubts about how valuable it is (IIRC, it has no intrinsic voting rights of its own and doesn't represent a significant ownership interest -- just the ability to veto a merger/acquisition).



Quoting Sllevin (Reply 2):
Part of the short reason is that NW really needs CO to remain a significant airline. I'm speaking from a route stanpoint, of course.

Losing CO as a partner would be a double whammy -- the CO+partner would represent a stronger competitor that CO and a standalone other airline are now, *and* NW would be weakened at the same time. So NW isn't going to be quick to approve anything that hurts them and helps a competitor at the same time.

Impressive, well thought answers from the both of you. Bravo, well done. A tip of my cap to you, Lincoln and Sllevin.



A little bit louder now, a lil bit louder now...
User currently offlineBAW716 From United States of America, joined Nov 2003, 2028 posts, RR: 27
Reply 4, posted (8 years 1 month 1 week 3 days 21 hours ago) and read 2226 times:

NW holding that chip on CO keeps the SkyTeam alliance intact; especially given the fact that DL has no intention of doing a deal with US. NW is a much stronger carrier with CO as a competitor and a code share partner. The revenue share from the code share alone is worth millions of $$.

NW won't give up something that valuable.

baw716



David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
User currently offlineLemurs From United States of America, joined Mar 2005, 1439 posts, RR: 4
Reply 5, posted (8 years 1 month 1 week 3 days 21 hours ago) and read 2195 times:

Lincoln has it right. If you read CO's financial statements, it is very clear about the limitations of the golden share. It only exists as long as NW exists and can't be transfered. It has no voting rights, and doesn't represent anything tangible or asset based at all. If NW folds, the share goes out of existance. It is essentially only useful as a veto over other airlines aquiring CO, and only for NW.

Some very creative financial types created the single share for NW there, because it is very specific, and very limited.



There are 10 kinds of people in the world; those who understand binary, and those that don't.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Why Doesn't NW, DL, CO, US... posted Wed Feb 18 2004 06:50:51 by Boeingman
Why Don't CO, DL, Or NW Fly To Australia? posted Sat Aug 28 2004 08:23:03 by ACB777
Why Did NW, CO, And BN Ditch Their 707s So Early? posted Sun May 14 2006 05:28:57 by Starstream707
Why Don't CO Regs Have Letters? posted Wed Mar 3 2004 04:34:28 by Cory6188
Why Don't DL/US/NW Fly From LHR? posted Fri Jun 13 2003 11:21:42 by NoelG
Why Would NW Want To Block Co From Buying DL posted Sun Feb 4 2001 04:19:20 by CdfMXTech
Why Don't UA Fly DEN/HNL/MEL & BNE With 777's? posted Sat Nov 4 2006 08:08:16 by Australia1
Why Doeesn't NW Have An All PW Fleet posted Mon Oct 16 2006 00:16:39 by FL370
Why Don`t Ryanair Fly To Tallinn-Ulemiste/ Estonia posted Tue Oct 3 2006 19:24:15 by Sukhoi
JL, Why Don't They Upgrade F/C Class Cabin? posted Sat Sep 23 2006 02:55:55 by Ktachiya