2nd Round of Bidding for NWA Ends With 4 Offers
A second round of bidding for the parent of Northwest Airlines ended Friday with four groups submitting revised offers.
Few details were available about bids for NWA Inc. from Pan Am Corp., oil billionaire Marvin Davis, Northwest’s machinists union and Los Angeles financier Alfred A. Checchi. As in the past, NWA refused to comment on the offers.
The Eagan, Minn.-based airline, the fourth-largest in the nation, invited bids in April after rejecting an unsolicited $2.7-billion offer from Davis, the former owner of 20th Century Fox. The company has said it is reviewing options to “enhance shareholder value,” including a possible special dividend to shareholders, a corporate reorganization or a sale. On June 5, a special committee of NWA’s board of directors rejected all bids for the company, and invited bidders to submit new offers.
Additional Equity
One initial bidder, MEI Diversified--a snack foods company controlled by Minnesota Twins owner Carl Pohlad and financier Irwin Jacobs--dropped out of the bidding before Friday’s deadline.
In a statement, Pan Am said its revised offer included $200 million in additional equity from Corporate Partners Ltd., a fund organized by the New York investment firm of Lazard Freres & Co. to take friendly positions in companies under attack. Earlier this year, for instance, it acquired a 10% stake in Polaroid, helping to rescue the company from a threat by Shamrock Holdings.
The alliance with Pan Am suggests that Corporate Partners no longer confines itself to corporate rescues. Calls regarding Corporate Partners were referred Friday to Alan Colner, a Lazard vice president, who declined comment.
Final Offer
Pan Am said that, with the contribution from Corporate Partners, it now has $600 million in equity available for an NWA acquisition. The New York-based airline declined to discuss other aspects of its offer, however.
“The new equity allows us to make a bid that is vigorously competitive and attractive to NWA’s shareholders, employees and others who have a strong stake in Northwest’s long-term future,” Thomas G. Plaskett, chairman and chief executive of Pan Am, said in a prepared statement.
A spokeswoman for Davis said the Los Angeles investor’s revised and final offer was greater than his previous bid for NWA but declined to provide details. Davis, who owns 3% of NWA, touched off the auction process with a $90-a-share bid. On Friday, NWA shares closed at $107.625, up 12.5 cents in composite trading on the New York Stock Exchange.
