AMR Says Trump’s Bid Was ‘Ill-Considered’
AMR Corp. called billionaire Donald J. Trump’s aborted $7.5-billion takeover attempt “ill-considered and reckless” Wednesday and said the parent company of American Airlines “has not been, and is not, for sale.”
In its first statement since Trump’s $120-a-share offer was made Oct. 4, the AMR board said, “We are pleased that Mr. Donald Trump has withdrawn his uninvited proposal to negotiate a cash merger agreement with AMR.”
The board added, “Ill-considered and reckless acquisition proposals adversely affect employee, financial and business relationships and are contrary to the best interests of AMR shareholders.”
Then, in words indicating to some analysts that the company plans no massive restructuring, the board added: “AMR has been operating pursuant to a highly successful long-term plan designed to create growth and value. This plan promises even greater success and growth in the future. Thus, we see absolutely no basis for departing from that strategy and believe that the imposition of a highly leveraged capital structure would have very unfavorable effects.”
There had been widespread speculation that a restructuring--including some kind of payout to shareholders--would be necessary to satisfy expectations that had been heightened by Trump’s $7.5-billion bid for the company.
The board took no other action stemming from Trump’s offer, spokesman John Hotard said.
Trump was not available for comment.
Some analysts were surprised that the board had not used Wednesday’s meeting to erect stronger takeover defenses, such as taking advantage of lower stock prices to create an employee stock ownership plan that would place a big block of shares into friendly hands, making a hostile takeover nearly impossible.
They added that if AMR is serious about remaining free of the clutches of corporate raiders, it will have to make some defensive move quickly.
AMR stock rose 75 cents to $74 a share Wednesday in heavy trading on the New York Stock Exchange.
Trump withdrew his bid Monday because of the tumble in AMR’s stock price during and after the market’s Friday the 13th selloff.
The selloff was sparked by troubles in financing a $6.75-billion management-employee buyout of UAL Corp., parent of United Airlines. AMR stock had risen to $107 immediately after Trump’s offer but fell to the mid-$70s in the market plunge.
