Ueberroth May Lower Bid for Eastern
A group led by ex-baseball commissioner Peter V. Ueberroth plans to lower its $464-million bid for strike-torn Eastern Airlines, sources close to Ueberroth said Monday.
The group plans to reduce its offer to reflect developer Donald J. Trump’s agreement with Texas Air Corp. to buy Eastern’s prized Northeast shuttle for $365 million, the sources said. Ueberroth’s original proposal--which was withdrawn last week after he was informed that it had been topped by another suitor--was for all of Eastern, including the Boston-New York-Washington shuttle service.
Separately, union and airline sources said Monday that a 15-member committee representing unsecured creditors of Eastern was asking those interested in buying Miami-based Eastern to present their offers at a meeting today.
Union sources also said the Air Line Pilots Assn. has agreed to meet in the next few days with possible Eastern suitor Jay A. Pritzker, head of the Hyatt Corp. hotel chain.
The Ueberroth group on Thursday withdrew its $464-million offer for Eastern after Texas Air said it had been “materially” outbid by another suitor, identified by sources as Pritzker.
However, Texas Air hasn’t eliminated Ueberroth’s bid from consideration, sources close to the company have said.
Pritzker offered around $500 million for the whole airline, according to sources close to the situation. The Hyatt chairman is expected to meet soon with the Eastern pilots union, possibly today, union sources said.
Takeover strategist Carl C. Icahn, the owner and chairman of Trans World Airlines Inc., also has expressed interest in Eastern and has garnered support from its unions. But he has not yet presented an offer to the Texas Air board.
The Ueberroth group offered to give Eastern employees a 30% stake in the airline in exchange for salary concessions. The proposals by Pritzker and Icahn would involve similar arrangements, according to sources.
May Discuss Strategy
Ueberroth, Icahn and Pritzker were unavailable for comment when contacted Monday.
In addition to reviewing bids, the creditors committee also may discuss strategy and organizational issues related to Eastern’s reorganization under Chapter 11 of the U.S. Bankruptcy Code, according to people familiar with the proceedings who asked not to be identified.
U.S. Bankruptcy Judge Burton Lifland, who is overseeing Eastern’s reorganization, has asked members of the creditors committee not to discuss developments at today’s meeting with the press, the sources said. The meeting, possibly the first of a weekly series, is expected to be held in the offices of lawyers representing one of the creditors, they said.
The creditors committee includes representatives of major aircraft and engine manufacturers, banks acting as trustees for Eastern bondholders, and the Eastern machinists and pilots and non-union employees.
The panel has the right to review any reorganization plan proposed by Eastern and can propose its own plan to the bankruptcy judge. It represents unsecured creditors, who are the most likely to lose money in the bankruptcy reorganization because they have no collateral, or security, from Eastern in case of default.
The machinists union at Eastern struck the airline March 4, drawing the support of pilots and flight attendants and bringing operations to a virtual halt.
