Icahn Revives Effort for Total Control of TWA : Chairman’s Resumption of Bid to Take Airline Private Sends Stock Up $7

Financier Carl C. Icahn offered Friday to buy the 23% of Trans World Airlines stock that he does not already own, resurrecting his proposal to take the company private.

Icahn, who is TWA’s chairman, dropped a similar proposal after the stock market crashed on Oct. 19.

Under the new plan, stockholders other than Icahn would receive for each of their shares a combination of $20 in cash and $29 in face amount of notes paying 12% interest due in 2008. The company has 30 million common shares outstanding, of which Icahn controls 77%.

The announcement sent TWA’s stock up sharply. It rose $7 a share to close at $35.125 on the New York Stock Exchange.

Louis A. Marckesano, airline analyst for the securities firm Janney Montgomery Scott Inc. in Philadelphia, called the offer “a good deal for shareholders . . . generous in price.”

Richer Than Expected

“The difficulty is putting a discounted value on the paper,” he said. “We’d put it at a (combined) value in the low $40s.”

That would make the offer worth at least $276 million at $40 per share for the 6.9 million shares Icahn does not already control.

Edward J. Starkman, who watches TWA for Paine Webber Inc., said Icahn’s offer was “a little richer than what a lot of people were looking for.”

“We’re thinking in terms of its being worth $36 to $38 (per share), roughly--and those kind of numbers look pretty good,” he said.

Julius Maldutis, an analyst at the Salomon Bros. securities firm, declined to comment on Icahn’s offer, other than to say he believed TWA’s stock was worth between $40 and $42 per share.

Icahn’s previous offer was $20 in cash and $25 in face amount of the bonds per share.

A statement released by TWA said the new offer was conditioned on approval by a majority of the TWA shareholders not affiliated with Icahn, and the satisfaction of appropriate regulatory requirements.

In addition, it said Icahn reserved the right to change the terms, if TWA’s stake in Texaco--consisting of about 20.6 million shares, or 8.5% of the oil giant’s stock--should change substantially in value.

Earnings Drop

Once consummated, employee stock ownership plans would be established to give the airline’s employees about 10% ownership in the newly merged company, a statement issued by TWA said.

Separately, TWA announced that it lost $55.5 million in the first quarter, slightly less than the $54.8 million it lost in the same period last year.

“These results reflect substantially greater interest charges during the first quarter of 1988 than existed in the first quarter of 1987 and do not include unrealized gains of approximately $340 million from TWA’s portfolio of marketable securities,” a statement said.

Nearly $220 million of those gains occurred in the first quarter, it added.

The company said its $7.8 million first-quarter operating loss--which compared to a $24.3 million operating loss in the same period of 1987--”was the best operating performance for what traditionally is TWA’s most unprofitable quarter in over 20 years.”

Operating revenue totaled $920.2 million in the three months ended March 31, compared to $824 million in the 1987 first quarter.