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FL Group hf of Iceland, an international investment company specializing in private-equity and strategic equity investments, has sent a letter to AMR Corp.'s (parent of American Airlines) Board of Directors, urging the company to spin-off its AAdvantage Frequent Flyer program, which FL Group says could boost shareholder value by more than $4 billion. FL Group said it owns 8.3% of AMR, making it the company's largest shareholder. AMR's share price has fallen by nearly 50% year-to-date, for a loss of about $5 billion in market capitalization. "After taking a close look at the company over an extended period of time, our suggestions include monetizing assets, such as AAdvantage, that can be used to reduce debt or return capital to shareholders. We believe that there is no time to lose given the recent developments in the market place," commented FL Group CEO Hannes Smarason. Shares of AMR gained 1% to $21.77 on Wednesday and were last up 3.35% to $22.50 in thin Thursday pre-market trading.

Sources: Press release, Bloomberg
Commentary: Russell 1,000 Stocks With the Lowest PE/Growth Ratios21 Airline Stocks to Keep You Flying High This SummerScreening for Potential Buyout Targets
Stocks/ETFs to watch: AMR. Competitors: NWA, DAL, UAUA, LUV, JBLU
Earnings call transcript: AMR Q2 2007

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Source: AMR Urged to Spin-off Frequent Flyer Program