UAL Stock Rises Sharply on Rumor Bass Bought Stake
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NEW YORK — The stock of UAL Corp., parent of United Airlines, rose $6.75 on Tuesday, with the primary reason apparently being an unconfirmed report that a group headed by Texas investor Robert M. Bass had begun to acquire the stock.
But the increase--to $146 a share--was the result of a number of reasons, observers maintained.
Some large UAL shareholders and analysts said the stock has been “undervalued” and is just catching up to other airline stocks. Compared to the stocks of American Airlines and Delta Air Lines, UAL has been “selling for less than it should, and the gap is now closing,” said one large shareholder of UAL who asked not to be identified.
There has been considerable speculation in airline stocks in recent days, the result of the $121-per-share offer for NWA Inc., the parent of Northwest Airlines.
“The Northwest situation has put takeover pressure on other airline stocks,” said Robert Decker, an airline analyst with the Chicago consulting firm of Duff & Phelps. “Everyone is guessing who will be next--and that distinction is going to UAL.”
The newspaper USA Today reported Tuesday that Bass’ group had bought between 2.5% and 3% of UAL’s stock.
A UAL spokeswoman said the company “declines comment on the current stock activity.” A spokesman for Bass also declined to comment.
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