At the time, NW was being persued by quite a few suitors anxious to try a leveraged buyout of Northwest due to the large amount of assets and little debt at the airline. It had the strongest balance sheet in the industry
PanAm at the time was sinking fast and decided to join in the leveraged buyout hunt of Northwest. They would have used Northwest's cash and assets to buy Northwest and then merge it into Pan Am.
This buyout by Pan Am did not work out and instead Northwest was purchased in a leveraged buyout by a group called Wings Holdings.