Positiverate From United States, joined May 2005, 1590 posts, RR: 7 Posted (2 years 5 days 3 hours ago) and read 7366 times:
Delta Seeks Creditor Help to Fend Off US Air Bid: Report
NEW YORK ( Reuters) - Bankrupt Delta Air Lines Inc. (DALRQ.PK) is trying to rally support from creditors to help fend off a takeover bid by US Airways Group Inc. (LCC.N), the Wall Street Journal reported on its Web site on Friday.
Delta Chief Executive Gerald Grinstein and other executives have held a series of conference calls with creditors to sift through terms of US Airways' offer, pressing creditors to back Delta's restructuring plan, the paper said.
TVNWZ From United States, joined Feb 2006, 1304 posts, RR: 0 Reply 1, posted (2 years 5 days 3 hours ago) and read 7311 times:
Here is what I predict:
The creditors will act like the deal is "insufficient" to force the price up a little more. and they will have "concerns" over some other aspects, for the same reason.
DL will attempt to come up with better numbers than US if the creditors go along with DL's plan. Ultimately, they will accept the plan that puts more net dollars in their pockets.
Flydl2atl From United States, joined Aug 2005, 119 posts, RR: 2 Reply 2, posted (2 years 5 days 3 hours ago) and read 7210 times:
Does anybody have a list of Delta's largest creditors? If I recall correctly, Boeing is up there on the list. Wouldn't it make a lot more sense for Boeing to back DL Mgmt. After all, future DL orders under the current mgmt are almost a lock and we're talking billions of dollars worth. However, if DL is aquired by US or UA wouldn't those same orders be in jeopardy of being lost to Airbus? I would think Boeing and Amex would definitely line up with DL MGMT. It seems they have a lot to lose with DL under USAirways.
Jcavinato From United States, joined Jan 2005, 439 posts, RR: 0 Reply 3, posted (2 years 5 days 2 hours ago) and read 7152 times:
TVNWZ, your're right on the money with this scenario/prediction. Having been on a few company boards (a few of them through merger and acquisition), this is to be expected.
SESGDL From United States, joined Jan 2001, 2546 posts, RR: 17 Reply 4, posted (2 years 5 days 1 hour ago) and read 7033 times:
Quoting TVNWZ (Reply 1): DL will attempt to come up with better numbers than US if the creditors go along with DL's plan. Ultimately, they will accept the plan that puts more net dollars in their pockets.
Are you saying they will accept DL's plan or US's plan? Good God I hope this doesn't go through!
ScottB From United States, joined Jul 2000, 3967 posts, RR: 22 Reply 5, posted (2 years 5 days 1 hour ago) and read 6951 times:
Quoting Flydl2atl (Reply 2): Does anybody have a list of Delta's largest creditors? If I recall correctly, Boeing is up there on the list.
The Delta pilots are up there on the list of unsecured creditors, since they were granted a large (around $2 billion if memory serves) unsecured claim in exchange for giving up additional wage concessions and agreeing to the pension plan termination. I believe the Pension Benefits Guarantee Corporation is also a large unsecured creditor.
DeltaGuy767 From United States, joined Jun 2005, 556 posts, RR: 2 Reply 6, posted (2 years 5 days 1 hour ago) and read 6910 times:
Quoting ScottB (Reply 5):
The Delta pilots are up there on the list of unsecured creditors, since they were granted a large (around $2 billion if memory serves) unsecured claim in exchange for giving up additional wage concessions and agreeing to the pension plan termination. I believe the Pension Benefits Guarantee Corporation is also a large unsecured creditor.
Well I can tell you for sure that AMEX and GE Capital are numbers 1 and 2 on the unsecured creditors list because I had to do some accounts regarding the DL BK, however other than that I'm not allowed to divulge anything. Personally as a private citizen, I believe that the creditors will probably not accept the offer because they will be getting at most .25 on the dollar as they are owed 16 billion and are only guaranteed (cash) 4 billion from US with an additional $4 in stock options. A company such as AMEX or GE Capital or Boeing is not going to give up 75% of their cash investments into DL just to let it be taken off their hands. Unless we see 8-12 billion in cash being offered, the creditors will not let DL merge.
Cheers from BDL,
DeltaGuy767
" Cutlass 9RA, Bradley Tower No Delay, Delta 767 holding for runway 24."
Planemaker From Tuvalu, joined Aug 2003, 3475 posts, RR: 18 Reply 7, posted (2 years 5 days 1 hour ago) and read 6911 times:
Quoting TVNWZ (Reply 1): The creditors will act like the deal is "insufficient" to force the price up a little more. and they will have "concerns" over some other aspects, for the same reason.
FYI, the Financial Times reported that Delta's unsecured debt was recently trading at around 40 cents on the dollar. For creditors money is all that matters... and US is beating the current 40 cents with their cash and stock offer.
DAL767400ER From Germany, joined Feb 2005, 5434 posts, RR: 48 Reply 8, posted (2 years 5 days 1 hour ago) and read 6879 times:
Quoting Flydl2atl (Reply 2): ? If I recall correctly, Boeing is up there on the list. Wouldn't it make a lot more sense for Boeing to back DL Mgmt. After all, future DL orders under the current mgmt are almost a lock and we're talking billions of dollars worth.
No doubt about that. Now, I don't know how much $$$ Boeing has actually given to Delta, but they definitely see the order potential they have with Delta, namely:
-At least 5 77Ls in addition to DL's current 5 777s on order
-At least 100 787s, if not even 150-200, depening on what DL would replace their 757s with
-Either around 100 additional orders, or (longterm) 200+ 737RS/Y1 orders.
In short, DL would be too valuable of a customer for Boeing to lose, and I'm sure Grinstein&Co will mention that to Boeing on a regular basis .
Haggis79 From Germany, joined Jun 2006, 751 posts, RR: 1 Reply 9, posted (2 years 5 days 1 hour ago) and read 6877 times:
Quoting Planemaker (Reply 7): FYI, the Financial Times reported that Delta's unsecured debt was recently trading at around 40 cents on the dollar. For creditors money is all that matters... and US is beating the current 40 cents with their cash and stock offer.
yeah, but it's cash AND STOCK.... and the stock might become worthless pretty quick, if the merger fails and the entire combined entity US/DL goes bankrupt...
Dank From United States, joined Jul 2006, 782 posts, RR: 14 Reply 10, posted (2 years 5 days ago) and read 6822 times:
Quoting TVNWZ (Reply 1): DL will attempt to come up with better numbers than US if the creditors go along with DL's plan. Ultimately, they will accept the plan that puts more net dollars in their pockets.
And this is potentially why the creditors may go along with US on this. I'm not saying they will. But in the end, they want to know which way will yield the biggest profit in the short and long term.
Planemaker From Tuvalu, joined Aug 2003, 3475 posts, RR: 18 Reply 11, posted (2 years 5 days ago) and read 6812 times:
Quoting DeltaGuy767 (Reply 6): Well I can tell you for sure that AMEX and GE Capital are numbers 1 and 2 on the unsecured creditors list because I had to do some accounts regarding the DL BK, however other than that I'm not allowed to divulge anything.
Here is the list of the top 20 unsecured creditors from their filing...
1 BOEING COMMERCIAL AIRPLANE GROUP $3,718,340,366 FUTURE AIRCRAFT COMMITMENTS
2 THE BANK OF NEW YORK $924,895,000 DELTA AIR LINES 8.30%
3 THE BANK OF NEW YORK $537,500,000 DELTA AIR LINES 8.125% DUE 2039
4 THE BANK OF NEW YORK $499,340,000 DELTA AIR LINES 7.90%
5 THE BANK OF NEW YORK $497,585,000 MASSPORT SERIES A, B & C
6 THE BANK OF NEW YORK $350,000,000 DELTA AIR LINES INC. 8% CONVERTBLE
7 THE BANK OF NEW YORK $325,000,000 DELTA AIRLINES 2.875% CONV. SR.
8 THE BANK OF NEW YORK $295,495,000 DEVELP AUTH OF CLAYTON CNTY-A,
9 THE BANK OF NEW YORK $247,772,000 DELTA AIR LINES 10.00% SENIOR
10 THE BANK OF NEW YORK $135,202,000 8.00% NOTES DUE 2007
11 SUNTRUST BANK $124,770,000 FULTON COUNTY - OCIII
12 THE BANK OF NEW YORK $121,975,000 DELTA AIR LINES 7.70%
13 THE BANK OF NEW YORK $105,766,000 DELTA AIR LINES 9.75%
14 THE BANK OF NEW YORK $102,455,000 DELTA AIR LINES 9.00%
15 THE BANK OF NEW YORK $84,665,000 DELTA AIR LINES 10.125%
16 THE BANK OF NEW YORK $68,725,000 DELTA AIR LINES 10.375% DUE 2011
17 THE BANK OF NEW YORK $63,548,000 DELTA AIR LINES INC. 9.25% DUE 2022
18 THE BANK OF NEW YORK $54,329,000 DELTA AIR LINES INC. 10.375%
19 SUNTRUST BANK $29,900,000 FULTON COUNTY - 1992
20 THE BANK OF NEW YORK $27,500,000 DELTA AIR LINES MTN SERIES B
Quoting Haggis79 (Reply 9): yeah, but it's cash AND STOCK.... and the stock might become worthless pretty quick, if the merger fails and the entire combined entity US/DL goes bankrupt...
Well, you don't know how much is cash and how much is stock. And, judging from the market's reaction to the news and the result of the HP/US merger (AC made a killing), the market is looking at this proposed merger favourably.
TVNWZ From United States, joined Feb 2006, 1304 posts, RR: 0 Reply 12, posted (2 years 5 days ago) and read 6796 times:
Quoting SESGDL (Reply 4): Are you saying they will accept DL's plan or US's plan? Good God I hope this doesn't go through!
The plan with the most net dollars.
Quoting Jcavinato (Reply 3): TVNWZ, your're right on the money with this scenario/prediction. Having been on a few company boards (a few of them through merger and acquisition), this is to be expected.
Glad to find another board colleague!
Quoting Planemaker (Reply 7): FYI, the Financial Times reported that Delta's unsecured debt was recently trading at around 40 cents on the dollar. For creditors money is all that matters... and US is beating the current 40 cents with their cash and stock offer
This is indeed a big indicator. And as noted by Haggis79, stock is important too. But, Haggis 79, Parker has a very, very good stock record. the faact that Citi is willing to pony up the $4B cash gets Wall Streets attention big time.
Quoting DeltaGuy767 (Reply 6): A company such as AMEX or GE Capital or Boeing is not going to give up 75% of their cash investments into DL just to let it be taken off their hands. Unless we see 8-12 billion in cash being offered, the creditors will not let DL merge.
Sure they will. The creditors will go with the offer that they think is safest and nets them the most dollars. Parker has a track record that could make those creditors very comfortable. They are businessmen. they will go for the money.
Quoting DAL767400ER (Reply 8): DL would be too valuable of a customer for Boeing to lose, and I'm sure Grinstein&Co will mention that to Boeing on a regular basis .
Who says Boeing would lose? The alliances of today, may be different tomorrow. Parker will tell Boeing what they need to hear to make them comfortable to accept the deal. Or he would not be doing the deal.
US management has looked at this inside and out. I would not be surprised if they haven't already talked to AMEX, Boeing, GE and others (in a strictly off the record, golf game at the club over drinks and a steak kinda way.)
These are not stupid people.
I have looked at the Power Point presentation in the US website and listened to the conference call. From a business point of view, which I know a lot more about than the airline point of view, this is an unbelievably attractive deal. The assumptions are conservative, the labor costs assume the highest rate and the math adds up and makes sense--as presented.
Strong plan. Strong track record with Wall Street. Interesting to see what happens.
ScottB From United States, joined Jul 2000, 3967 posts, RR: 22 Reply 13, posted (2 years 5 days ago) and read 6696 times:
Quoting Planemaker (Reply 7): FYI, the Financial Times reported that Delta's unsecured debt was recently trading at around 40 cents on the dollar. For creditors money is all that matters... and US is beating the current 40 cents with their cash and stock offer.
But the big question mark is the value of the stock being offered. Right now, LCC is trading at a P-E ratio of 128 (though the forward P-E ratio is 8). Moreover, LCC's share price is at a whopping 6.0 times the book value of the company; compare that to LUV at 1.91.
I don't believe this offer will be sweet enough to sway the creditors, and the escalation in the value of the unsecured debt to above the US Airways offer value probably corroborates that.
JetBlueGuy2006 From United States, joined Jan 2006, 1276 posts, RR: 1 Reply 14, posted (2 years 5 days ago) and read 6641 times:
I really hope this doesn't go through. I just think some mergers are a good idea, i.e. US + HP, and others are an extreamly bad idea, the proposed US+DL. I really hope DL can fend this off.
Home Airport: Capital Region International Airport (KLAN)
Lufthansa From Christmas Island, joined May 1999, 1856 posts, RR: 6 Reply 15, posted (2 years 4 days 23 hours ago) and read 6623 times:
Quoting TVNWZ (Reply 12): Who says Boeing would lose? The alliances of today, may be different tomorrow. Parker will tell Boeing what they need to hear to make them comfortable to accept the deal. Or he would not be doing the deal.
Exactly! Well said!
I would assume it in many ways would actually be quite attractive to Boeing in terms of Additional 777 sales. We could see US Airways A333s dumped or redeployed elsewhere, and many of the 767 routes upgraded to larger equipment from a single hub. Operating the 764 or A333 that were previously 762/763 type flights will bring significant cost savings there in itself (provided they can be filled), now take that a step further and make all those flights 773ER or even as a stopgap measure some 744s, once again, provided they can be filled, you're going to see significant economies of scales gained. I' would think beoing's chances of scoring more longhaul aircraft is good. Possibly even additional 764 (because there are already a large fleet) and i'd say almost without question more 777s.
Evan767 From United States, joined Aug 2005, 2620 posts, RR: 1 Reply 16, posted (2 years 4 days 22 hours ago) and read 6433 times:
Please work. Can someone give me their opinion of if my mother would be O.K. if the merger were to go through with a senority date of 98 with DL? Nobody wants this to go through and if it does, it's bound to screw over thousands of employees. My mother says the new airline would have around 75,000 employees and DL currently employs about 65,000.
The proper term is "on final" not "on finals" bud...
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