Pritzker May Make Takeover Offer for Eastern Airlines
Chicago entrepreneur Jay A. Pritzker reportedly may make a competing offer for Eastern Airlines, but Texas Air, which already has a written agreement to acquire Eastern, vowed Wednesday that it will fight any such attempt in the courts.
Eastern’s unions, which have been fighting the Texas Air takeover because of the anti-union stance of Texas Air Chairman Francisco A. (Frank) Lorenzo, said they have been talking with Pritzker concerning a rival bid for the Miami carrier. Texas Air is a holding company that also owns Continental Airlines and New York Air.
“We have been in touch with the Pritzker family,” said David Butler, a spokesman for the Transport Workers Union, which represents Eastern’s 7,300 flight attendants. “We are seeking somebody other than Mr. Lorenzo who might have an interest in Eastern.”
Unions Own 15% to 20% of Stock
Butler said his union had talks with the other two Eastern unions, the Air Line Pilots Assn. and the International Assn. of Machinists, about the search for an alternate bid. Members of the three unions own between 15% and 20% of Eastern’s common shares.
Daniel J. Vician, secretary-treasurer of the Eastern Master Executive Council of the Air Line Pilots Assn., said ALPA had engaged Lazard Freres & Co., an investment banking firm, and Skadden, Arps, Slate, Meagher & Flom, a law firm specializing in takeovers, to seek an alternative to Texas Air.
The 61-year-old Pritzker is one of the members of a Chicago family of financiers whose holdings bring in nearly $3 billion in annual revenue. Run by Jay’s brother, Robert A. Pritzker, 57, they include Braniff Inc., the recently reorganized airline; Hyatt Hotels, a 75-unit chain of domestic hotels, and Hyatt International Corp., which operates in 27 countries.
“Mr. (Jay) Pritzker has no comment” on reports that he is contemplating a rival bid for Eastern, a secretary in the financier’s Chicago office said.
Both Eastern and Texas Air said they had no knowledge of a union-supported offer by Pritzker. But Texas Air spokesman Bruce Hicks said any attempt to interfere with the merger, which was agreed to by Eastern and Texas Air on Feb. 24, would end up in the courts.
“Any discussions about salaries or concessions with anyone other than the designated bargaining representatives of Eastern Airlines is a violation of the Railway Labor Act,” Hicks said.
Texas Air, under the agreement, has increased its holdings in Eastern to 51%. The Department of Transportation is scheduled to hold hearings on the merger beginning May 27, and a decision is expected sometime this summer.
Observers said any attempt to stop the takeover would be virtually certain to fail because Texas Air already owns a controlling interest in Eastern. However, they said an alternative offer would have a chance if the government blocks the merger.
