Absence of Northwest Deal Sets Pan Am Stock Falling

Pan Am Corp. dashed speculation of an impending deal with Northwest Airlines today when its board of directors ended a regularly scheduled meeting without making any announcement.

“The board meeting concluded shortly after noon,” Pan Am spokeswoman Pamela Hanlon said. “The company will have no announcement as a result of the meeting.”

That announcement burst the bubble of a two-day rally that saw Pan Am’s stock rise 25%.

Speculation of some type of deal between the two airlines had driven Pan Am stock up to a peak of $4 a share this morning, compared with $3 a share at the close of trading Friday.

But after Pan Am announced the board meeting had ended without any statement, the stock fell. In afternoon trading, Pan Am was off 37.5 cents at $3.375 a share.

Hanlon declined comment on speculation that the board discussed a deal, possibly a merger, between Pan Am and Northwest at the meeting.

“The company, in line with longstanding policy, will not comment on speculation of that sort,” Hanlon said.

Northwest also said it had a policy against commenting on speculation about a potential deal. A spokesman for the Minnesota-based airline, however, said no announcement of any kind was planned.

Speculation was sparked Monday by Pan Am’s Teamsters Union, which said the airline’s board would consider a deal under which Northwest would buy the New York-based carrier.

Last year Pan Am tried to buy NWA Inc., parent company of Northwest Airlines, but the airline instead agreed to a buyout offer led by Los Angeles investor Alfred Checchi.

Pan Am, troubled by thorny labor relations and growing competition on transatlantic routes, has been searching for a buyer or partner for years.