Investors Ready to Close Northwest Air Deal
The investment group proposing to buy Northwest Airlines for $3.65 billion said Monday that it was on the brink of closing the deal.
More than 99% of shares in parent NWA Inc. had been tendered to the group, Wings Holdings Inc., by Monday morning, according to the group headed by Alfred A. Checchi, the former Marriott Corp. treasurer.
Checchi, who lives in Beverly Hills, said his financing was nearly in place and that he was pressing for early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvement Act.
No Ruling Monday
Checchi said Wings was seeking to have the waiting period end Monday instead of its scheduled expiration Wednesday. The Federal Trade Commission, however, did not issue a ruling Monday.
The $121-a-share tender offer originally was set to expire at midnight last Friday, but Checchi extended the deadline to 4 p.m. CDT Monday. David Duffy, a Wings spokesman in New York, said the offer may be extended again this morning before the New York Stock Exchange opens.
NWA closed up 87.5 cents a share at $120.25 in NYSE trading Monday.
Meanwhile, NWA reported record second-quarter earnings of $70.8 million. The profit was more than double that for the second quarter a year ago, when the airline earned $28.4 million.
Revenue for the quarter climbed 19.3% to $1.65 billion from $1.38 billion in 1988, the company said.
NWA Chairman Steven G. Rothmeier said passenger traffic rose 16% over a year ago, with capacity growing 15.6%. The airline also experienced a 16.8% increase in freight revenue to $132.6 million.
Earnings for the first half of 1989 were $83.3 million on revenue of $3.13 billion. That contrasted with a $15.1-million net loss for the first six months of 1988, when revenue was $2.62 billion.
Northwest’s pilots union and NWA resumed contract talks Monday with the help of Josh Javits, chairman of the National Mediation Board.
An agreement with the pilots is considered crucial to Checchi’s plans to acquire the airline because a strike could impair his ability to generate enough cash to pay for the NWA acquisition.
Under federal regulations, if the pilots request that negotiations be declared at an impasse they could strike after a 30-day cooling-off period.
Tim Thornton, NWA vice president and general counsel, said the primary issues remaining to be settled include wages, work rules and job security.
He also said the pilots remained interested in a possible ownership position in the airline, but added that the other issues would have to be resolved first.
