Delta Rebuffs Improves US Airways Bid

The merger plot just thickened at Delta Air Lines. US Airways bumped up its takeover bid for the Atlanta-based airline by 20 percent Wednesday, to $10.3 billion, adding a Feb. 1 deadline in a move to pressure Delta's bankruptcy court creditors...


Neidl also said he thinks a Delta-Northwest deal would pass Justice scrutiny more easily because the two carriers have less route overlap.

But Parker made it clear US Airways isn't giving up.

"Simply stated, it is time for the process to move forward," Parker said in a conference call Wednesday.

He said he expects Delta creditors will agree to support the initial steps of a merger, such as beginning so-called "due diligence" of the proposed combination and asking federal regulators to begin an antitrust review, by the Feb. 1 deadline.

Parker, in an interview with the Atlanta Journal Constitution nine days ago, said, "We don't feel any need to amend the [initial] offer."

He said Wednesday that his airline decided to raise the offer after "more conversations with creditors," including a meeting Monday with retired Continental Airlines CEO Gordon Bethune, recently hired by Delta's unsecured creditors committee to help it evaluate the US Airways bid vs. Delta's stand-alone plan.

Bethune presented his report to the committee Wednesday.

"It was quite clear as we had more conversations that they ... didn't see as clearly as we did that our proposal had so much more value that it justified the risk of going forward with us," Parker said. "We came to the conclusion that we should make the decision much, much easier for them."

Delta's unsecured creditors committee --- which includes big suppliers, banks and the carrier's pilots' union --- is a key player in determining the outcome of the takeover bid and is quietly evaluating both Delta's stand-alone plan and the US Airways offer.

The committee hasn't given a public reaction to the merger offer so far. Leaders of Delta's pilots' union oppose it.

"We're 100 percent focused on killing this US Airways hostile merger," union chief Lee Moak said Wednesday. He declined to even address the reported talks with Northwest. "Our goal is to emerge from bankruptcy as a stand-alone carrier. We're not even considering anything else."

Staff writer Dave Hirschman contributed to this article.

The Two Plans: Merger vs. Solo

US Airways' revised proposal:

* Worth about $10.3 billion, up 20 percent from first offer

* Delta's creditors get stock in merged company, plus $5 billion in cash

* Has Feb. 1 deadline for creditors to indicate support for initial steps toward pursuing a deal

* US Airways and Delta would integrate operations, generating $1.65 billion in savings or revenue via 'synergies'

* Merged airline called Delta, but US Airways' top management in charge

* Doesn't say where headquarters would be located

* Antitrust clearance by Department of Justice is required

Delta's plan

* Values company at $9.4 billion to $12 billion

* Sees Chapter 11 exit in mid-2007

* Creditors get newly issued stock for their claims, but no upfront cash at this point

* Current stock wiped out

* Exit financing to be negotiated

* Forecasts profits with existing strategy

* Delta remains Atlanta-based



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