US Airways raises cash-and-share offer for Delta to $5.09 billion
10 Jan 2007
Mumbai: US Airways Group Inc. has raised the offer price for its for larger but bankrupt rival Delta Air Lines Inc. to $5 billion and 89.5 million US Air shares. The new offer, which is based on the current stock price values Delta at $10.2 billion, the No. 7 US carrier said. The offer is set to expire on February 1 pending creditor support.
The airline boosted the cash portion by 25 per cent to $5 billion and the number of its shares by 14 per cent to 89.5 million.
Atlanta-based Delta had rejected US Airways' original offer for $4 billion and 78.5 million shares, made in November.
Delta's five-year business plan values the airline at as much as $12 billion. Using Delta's same economic and cost assumptions, US Airways said its new bid values it at $12.7 billion to $15.4 billion.
Also, under the revised offer, Delta creditors' stake in the combined airline would increase to 49 per cent from 45 per cent, it said.
US Airways has committed financing from Citigroup and Morgan Stanley for $8.2 billion, including $5 billion in cash and $3.2 billion in refinancing of existing debt at both airlines.
Both airlines are consulting the official unsecured creditors committee that will oversee terms for any bankruptcy exit by Delta. The panel is studying US Airways' offer as well as Delta's plan to remain a standalone carrier.
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