UAL Stock Plunges $13.50 a Share; Fading Hopes for Takeover Blamed

UAL Corp.’s stock price plunged to a seven-month low Monday amid investor pessimism that United Airlines employees will find financing for their proposed purchase of 75% of the parent company’s stock.

UAL, the parent of United Airlines, sank $13.50 to close at $136.50 a share on the New York Stock Exchange. A UAL spokesman, citing company policy, declined comment on the stock move.

UAL’s stock has gyrated since October, when a planned $6.8-billion, or $300-a-share, management- and pilots-led buyout for the company fell to pieces when the group failed to secure bank financing.

“It is mostly a reaction to the deal stocks in general,” said one stock speculator. “People are nervous, and they are getting tired of holding this thing,” said another takeover stock trader. “The carrying costs are high.”

Further, it has gradually dawned on the market that any deal for UAL is unlikely before Feb. 22, the date of the company’s next board meeting.

In a remarkable show of unity, UAL’s three unions last week offered to open talks with the company’s board with a view to buying 75% of the company. The board told its advisers to continue talks with the unions about their putting forward a buyout offer.

But the board also told the advisers to continue studying a recapitalization and to report back at the Feb. 22 board meeting. The elongated time frame also depressed UAL stock, traders said.