Deal or No Deal? US Airways Reportedly Sweetens Offer by $1B for Delta

Includes: AAL, DAL
by: Steven Towns

The Wall Street Journal reports US Airways could increase the cash portion of its $9.8 billion cash-and-stock hostile bid for Delta Air Lines by $1b under certain conditions, according to people familiar with the matter. Bloomberg meanwhile reports Delta's creditors may ask US Airways for an extension of its Feb. 1 deadline. US Airways' conditions include Delta opening itself for due diligence and requires the Delta creditor committee ask a bankruptcy judge to postpone a restructuring hearing next week. A group of Delta creditors separate from the official committee are reported to have approached US Airways late Friday proposing a bid increase of $2b. US Airways' unofficial offer was made Saturday bringing the cash portion of its bid to about $6b and won't increase the number of shares from its previously stated 89.5m. In an attempt to alleviate Delta's concern about antitrust issues, US Airways is said to have also offered to pay a termination fee if the deal is blocked by the DoJ.

• Sources: Bloomberg, WSJ
• Related commentary: Delta Faces Congressional Scrutiny and Impatient Debtors, There's a Reason There Is No Airline ETF, US Airways Ups Ante for Delta to $10.2 Billion
• Potentially impacted stocks and ETFs: Delta Air Lines (DALRQ.PK), US Airways Group (LCC), Northwest Airlines (NWACQ.PK). Competitors: AMR Corp (NASDAQ:AMR), Southwest Airlines (NYSE:LUV), UAL Corp (UAUA), JetBlue Airways (NASDAQ:JBLU), AirTran Holdings (AAI)

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