A group of United Airlines employees announced plans Wednesday to compete with UAL's pilots for the right to buy the airline, saying that their plan provides for a $50-a-share payout to shareholders of Allegis, previously UAL Inc.
Even though the $2.8-billion offer is lower than the pilots' $4.1-billion proposal, William H. Palmer, a spokesman for the group, said, "We feel that our proposal avoids the catastrophic debt load of the ALPA (Air Line Pilots' Assn.) proposal, which would eventually lead to a financial collapse of the company."
Allegis would make no comment on the proposal except to say that its new chairman, Frank Olson, met Wednesday afternoon with representatives of the group, which calls itself the Coalition Acting for Rights of Employees (CARE). Later, Palmer said, "I would describe it as a very positive meeting," but he would give no details.
The pilots' offer was for $70 a share. Under that proposal, only the airline would be retained; the corporation's other businesses, Hertz Corp. and the Hilton International and Westin hotel chains, would be sold.
The CARE group's proposal would involve "keeping the majority of the stock in friendly, public hands" while at the same time ensuring partial employee ownership of the company. The non-airline entities also would be sold under this proposal.
A spokesman for the pilots union said ALPA had no immediate response to the competing offer. "We just saw it for the first time today," he said.
The CARE offer is the third takeover bid for Allegis, which is in the process of changing its name back to United Airlines. Besides the pilots' offer, an investment group sought to wage a proxy fight for control of the company.