AIRLINES : Pan Am's Possible NWA Bid Loses Luster

Times Staff Writer

A possible bid by Pan Am Corp. for the parent of Northwest Airlines was thrown into question Wednesday when it was learned that the wealthy Bass brothers of Ft. Worth aren't actively involved.

Billionaires Sid and Lee Bass are merely passive investors in the Airlie Group L.P., a 5-year-old partnership that invests mostly in high-yield, high-risk bonds, but has also acquired stakes in selected companies, including Terex Corp. A Pan Am spokeswoman acknowledged the brothers only learned of their involvement in a possible Pan Am bid after it was announced at the company's annual meeting in Washington on Tuesday.

The passive nature of the Bass investment raised questions about the strength of a possible Pan Am bid, since the brothers, veterans of many takeover battles, brought substantial credibility to a potential Pan Am deal.

"I would say that if the Basses aren't interested, the deal won't work," said Daniel A. Hersh, an airline industry analyst with Bateman Eichler, Hill Richards in Los Angeles.

In a bizarre twist, Pan Am said Los Angeles financier Alfred A. Checchi is also a passive investor in the Airlie Group. Checchi is weighing making his own bid for the airline, with backing from Bankers Trust and Elders IXL, an Australian conglomerate. Checchi, a former executive with Marriott Corp., was a financial adviser to the Bass brothers around the time the Airlie Group was formed.

Checchi refused comment on Wednesday, and the Bass brothers couldn't be reached.

The largest member of the Airlie Group is the Equitable Life Assurance Society of the United States, which was also said to have learned of its involvement in the Pan Am deal on Tuesday.

It couldn't be learned whether the surprised members of the Airlie Group would attempt to force the partnership to pull out of the Pan Am deal. A Pan Am spokeswoman said the firm had no direct contact with any passive investors in the Airlie Group.

Although Airlie has assets of about $1 billion, most of its money is said to be invested in "junk bonds" and consequently it isn't clear how much would be immediately available for a Northwest takeover.

Most of the financing for a Pan Am bid would be raised by Prudential-Bache Securities, with some of the funding coming from its parent, Prudential Insurance Co. Thomas Fowler, president of Prudential-Bache Capital Funding, the unit that is putting together the funding package, couldn't be reached for comment.

Pan Am, a money-losing airline with a strong Atlantic route system, said Tuesday that it was considering a bid for NWA Inc., the parent of Northwest. The airline had been a takeover target since March, when Los Angeles billionaire Marvin Davis launched a $2.7-billion bid for the airline. His bid was rejected by NWA's board, which then announced it would consider all offers for the airline.

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