British Airways Pulls Out of UAL Bid

British Airways has decided not to participate in the takeover UAL Corp., the parent of United Airlines, it was learned Thursday.

The decision by British Airways is a major blow to the employee-management group that is trying to buy the airline. British Airways had agreed to contribute $750 million to the takeover effort, or about 80% of the equity needed to finance the deal.

Representatives of United’s management, pilots and flight attendants plan to meet in New York with their advisers today in an effort to restructure the deal.

The group, led by United Chairman and Chief Executive Stephen M. Wolf, had offered $300 a share, or $6.75 billion, for the airline. The deal collapsed a week ago after banks said it was too risky to finance.

The transaction would have given a 75% stake in United to its employees, a 10% stake to United’s management and a 15% stake to British Air. The deal, however, was opposed by United machinists and a group that represents non-union workers.

Since the buyout fell apart last Friday, the Wolf group has tried to revise the deal. When the deal fell apart, British Airways said it was willing to consider a new transaction, but apparently the British air carrier lost patience Thursday.

People close to the situation said it was premature to say how the Wolf group would revise the deal. The group needs to find a new equity partner, and that could be another foreign airline or an investment firm. One investment house that initially expressed interest in the transaction was Morgan Stanley, which operates a leveraged buyout fund.

Others on Wall Street have speculated that Los Angeles billionaire Marvin Davis might participate in the buyout. Davis put the airline into play in August when he bid $240 a share for the company. Two days ago, Davis withdrew his $300-a-share backup offer, but said he remained interested in the airline.