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Airline Merger Update
US Airways withdrew
its merger offer for Delta Air Lines after
Delta's creditors said they would not support
the buyout bid. The committee of unsecured
creditors formally endorsed Delta's plan
to emerge from bankruptcy as an independent
airline. The committee said it considered
many factors, including the deal's valuation,
timing, risks and likelihood of success.
Some industry analysts believe US Airways
will pursue another merger 'perhaps for
Northwest Airlines. US Airways CEO Douglas
Parker said earlier this week that bankrupt
airlines are attractive because they 'offer
good opportunities to boost profits.'
In the meantime, AirTran
Holdings is extending the deadline for its
$345 million takeover bid of Midwest Air
Group. The offer was originally set to expire
on February 8th but has now been pushed
back a month. On January 23rd, AirTran asked
the New York Supreme Court to order Milwaukee-based
Midwest Air to release its shareholder list,
claiming the airline is trying to "thwart
AirTran from communicating directly with
the Midwest shareholders about its offer
to merge the two airlines." Two days
later, Midwest's board unanimously recommended
its shareholders reject AirTran's takeover
bid, calling the offer 'opportunistic' and
saying it 'undervalues' the company.
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