TWA Seeks Emergency Help From U.S. to Avert Icahn Takeover

Trans World Airlines, clearly worried by the inroads that corporate raider Carl C. Icahn has made in his attempt to gain control of the airline, appealed late Thursday to the Department of Transportation for “emergency help” to prevent him from taking any further action.

It was the latest in a series of moves by TWA in the courts and before the department to stop a takeover by Icahn. The New York entrepreneur and an investor group that he controls have been buying TWA stock since March. Last week, he reported that he had accumulated just under 25% of the shares outstanding. On Tuesday, he offered $18 per share in cash for the remaining 75%, a deal worth about $600 million.

Meanwhile, TWA President and Chief Executive C. E. Meyer Jr. told the Senate subcommittee on aviation in Washington that a successful Icahn takeover would lead to the airline’s bankruptcy. He asked Congress to pass legislation directing Transportation Secretary Elizabeth Hanford Dole to prevent the takeover.

Asks for Prohibitions

In its request to the Transportation Department, the airline asked for an emergency order temporarily prohibiting Icahn from acquiring any more TWA shares, from commencing a tender offer for the remaining shares and from taking any action toward removing TWA’s board of directors, as he has threatened to do if TWA’s management does not allow shareholders to vote on his $18-per-share offer.

“TWA is asking DOT to take this action to ensure that the department will have an opportunity to review Icahn’s fitness to control the airline and the potential impact his control would have on TWA, its stockholders and employees, the communities it serves and the traveling public,” the airline said in a statement.

Last week, TWA had petitioned the department to investigate whether the airline would be fit to carry passengers in the event that Icahn gained control of it. It asked for a June 13 deadline for comments from anyone for or against the fitness ruling, but the department moved that deadline up to May 28.

Wallace Stefany, a department spokesman, said Thursday that no ruling could be expected until after the Memorial Day weekend. “We cannot comment on whether we have authority to issue such an emergency order until the deadline for comments on May 28,” he said.

TWA also has asked a federal court in New York and a Missouri court to block Icahn from pursuing his takeover effort. A hearing on the federal suit is scheduled for today.

Senate Testimony

At the Senate subcommittee hearings, scheduled before the Icahn takeover bid to discuss international aviation, TWA President Meyer said that, from conversations with Icahn, he is convinced that the financier would “stonewall” the airline’s needs, siphon money from it, sell aircraft and “over a period of time liquidate it or at the very least spend no money and make it unable for TWA to compete in a very fiercely competitive domestic aviation market, which will result in the reduction of employment and the eventual . . . bankruptcy of the company.”

Icahn has said that he intends to operate the airline, not liquidate it.

Legislation has been introduced in the House to prevent Icahn from voting stock or managing the airline for at least 90 days should he gain control.

The Transportation Department’s review would be carried out in that period.

A spokesman for Icahn said Thursday that the financier was in meetings and unavailable to comment on the latest TWA move. But the Associated Press quoted him as saying that, “in this era of deregulation, it would be inappropriate for the DOT to help a management entrench itself.”