February 5, 1999
ALPA, Intl
Committees
The statement was seen as a move to drive
up the price of any takeover by pressuring Continental Airlines to join the bidding.
United Airlines, the nation’s largest carrier, announced last month it was talking to
America West about a buyout. Delta Air Lines is also said to be discussing a deal with
America West. Continental already owns 8 percent of America West and has a marketing
alliance with the Tempe, Ariz.-based airline. In addition, it has first rights to purchase
the stock of TPG Partners LP, an investor group led by David Bonderman, which has a 49
percent stake in America West.
Continental contends it could take control of America West by acquiring only TPG’s
Class A shares, at an estimated cost of $50 million. Buying the entire company is expected
to cost more than $1 billion.
America West Holdings Corp. Chairman William Franke told airline analysts in Miami on
Thursday that TPG would support a takeover only if the acquirer bought all of the
company’s Class A and Class B shares.
Mike Miller, director of Avitas Inc., a Reston, Va.-based airline consulting firm, said
Friday that Franke sent two key signals:
America West and TPG are very serious about making a deal, and Continental—which
has indicated it won’t allow America West to fall to a rival carrier—should
expect to pay full price. Franke and Bonderman “clearly want to maximize the value of
the company for themselves and shareholders one way or another,” Miller said.
Bonderman has already cashed out some of his stake in America West, selling 1.95
million shares in May for $56 million. A buyout at $30 a share—the high end of
analysts’ estimates—would give Franke more than $30 million.
| America West Makes Stock Demand by Jerry Nachtigal, Business Writer Associated Press Newswire |
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| PHOENIX (AP) — America West’s biggest shareholder has served notice to other airlines that it won’t sell its stock in the nation’s ninth-largest airline unless the deal is part of a purchase of all of America West’s shares. |