UAL Allows Ex-Suitor Davis to Buy Shares

UAL Corp.’s Board of Directors said today it would allow former suitor Marvin Davis to again purchase UAL stock, raising the possibility of a rival buyout offer to the $3.8 billion bid by the company’s unions.

UAL’s board today agreed to negotiate over the proposal by United Airlines’ labor unions and an investor group, despite what it called “serious deficiencies” in the offer.

The board also instructed management to explore other alternatives for increasing its share values, including buyout proposals from other parties, and directed its financial advisers to develop a plan for selling company assets.

Today, the board said it had modified a standstill agreement with Davis, the Los Angeles billionaire who last year made a buyout offer for UAL, to permit him to purchase UAL stock.

Rob Doughty, UAL spokesman, said he could not elaborate on a brief statement the company issued announcing the move. Davis spokeswoman Mary Conway in New York also had no comment, and neither would say if Davis had a new buyout offer on the table.

UAL’s stock jumped $5.50 to $157.50 in late trading on the New York Stock Exchange.

In January, the board said it would consider offers from Davis, but the agreement had blocked him from purchasing stock.