Delta spurns US Airways overture
Delta Air Lines Tuesday rejected an unsolicited $8.4 billion offer from US Airways, and filed its plan to emerge from bankruptcy in the spring as a standalone company.
The Atlanta-based company's board of directors urged creditors to accept the plan, which valued the company at $9.4 billion to $12 billion, as superior to the U.S. Airways valuation and a better way to earn their money back.
Delta said in a statement that a merger with US Airways was fraught with uncertainty because of the potential difficulties in gaining antitrust approval and meshing different union labor pools, as well as faulty assumptions about efficiencies through streamlining operations, and concerns the company would be saddled with a huge debt load.
'The US Airways proposal provides inferior value to our standalone plan, is structurally flawed, and raises overwhelming regulatory and labor issues that — after a lengthy delay — are likely to prevent the proposed merger from being completed,” Chief Executive Gerald Grinstein said in a statement. 'For these reasons, Delta's board of directors has unanimously rejected the proposed transaction. Instead, we will continue to focus on creating value by building an airline that combines a right-sized domestic network and a profitable and expanding international presence with an best-in-class network cost structure and a strong balance sheet.'
Delta spurns US Airways overture
