Saul Steinberg Seeks Support for a UAL Bid

The struggle for UAL Corp. warmed up Wednesday as New York investor Saul P. Steinberg tried to round up support for a bid for the parent of United Airlines.

Persons familiar with the situation said Steinberg discussed a possible transaction Wednesday with First Boston Corp., UAL’s investment adviser, as well as advisers to United’s pilots and flight attendants.

The talks indicate that Steinberg, a close friend of UAL Chairman Stephen M. Wolf, is serious about gaining control of UAL. Last week, Steinberg requested government permission to buy more than 15% of UAL’s stock, but many on Wall Street viewed Steinberg as a passive investor.

UAL stock closed up $5.25 at $185 on the New York Stock Exchange on Wednesday.

Sources described the Steinberg talks as exploratory and said the investor didn’t discuss a specific takeover proposal. He wasn’t expected to have an offer ready by the time UAL’s board meets Monday.

Meanwhile, representatives of Coniston Partners, a New York investment firm that wants to take control of UAL, met with United’s machinists union Wednesday to find out what kind of transaction the union would support. John Peterpaul, general vice president of the International Assn. of Machinists, said no specific proposals were discussed.

Steinberg’s pursuit of UAL increases the competition for the company, which is already being courted by three other prominent investors. Besides Coniston, Los Angeles billionaire Marvin Davis is weighing a bid for the airline, and sources said Wednesday that Texas billionaire Robert M. Bass has approached UAL’s pilots and managers about a possible transaction.

The investors are trying hard to win over United’s unions, which played a large role in an earlier unsuccessful takeover attempt. A coalition of United’s pilots and managers tried to buy the company last month for $300 a share, but the unfunded bid collapsed Oct. 13, triggering a massive one-day slide in the stock market.

The offer was defeated in part by opposition from United’s machinists union, which remains against any transaction that would involve a large amount of debt. The machinists have said, however, that they would support a financial overhaul that gives employees a minority stake in the company.

Persons familiar with the airline say any successful bid would require support from the pilots and machinists, but that might prove difficult.

In the past few days, the pilots have been joined in their efforts by Wolf, who led the first buyout effort. Wolf, under pressure from UAL’s board, briefly withdrew from any takeover effort after the first bid collapsed, but the board recently gave him permission to explore a new offer. A well-connected source said it was possible that Wolf and the pilots might propose a new transaction for the company that wouldn’t require help from an outside investor.

However, the machinists aren’t happy with Wolf and have called on him to resign. The machinists have indicated to outside investors that Wolf’s continued involvement with United would be an obstacle to any transaction.