Trump Cancels AMR Bid as Stock Dips to $84.87 1/2

Donald Trump scrapped his proposed $7-billion offer for AMR Corp. today but said he is still considering making a lower bid for the parent of American Airlines.

It was the second unraveling of a giant airline deal since Friday and came against a background of growing alarm over debt-financed takeovers for large American companies.

“I am currently reviewing all my options with respect to AMR including making another offer at a lower price,” the New York-based developer said in a letter to AMR Chairman Robert L. Crandall.

Trump said he is also considering increasing his holdings in AMR or selling his stock.

Trump sent his letter after AMR’s stock dropped $13.75 a share to $84.87 1/2 on the New York Stock Exchange today following Friday’s 190-point decline in the Dow Jones industrial average. Trump had offered to buy AMR for $120 a share.

Friday’s stock plunge was caused in part by word that the management-led employee group seeking to buy UAL Corp., the parent of United Airlines, had been unable to secure financing for its proposed $6.75-billion buyout of that airline.

AMR’s stock was depressed today amid the uncertain outlook for airline takeovers. Trading in the airline’s shares was temporarily halted pending the announcement of Trump’s withdrawal.

AMR, based in Ft. Worth, said it has no comment on Trump’s decision. The airline, which has said it wanted to remain independent, had said it would study Trump’s proposal but the company made no other response to his overtures.