Air Canada Joins Bidding for Continental : Aviation: The Canadian airline teams with Texas investors in a $400-million bid for a controlling interest in the carrier.

Air Canada teamed with two Texas investors Thursday to announce a $400-million bid to buy a controlling interest in Houston-based Continental Airlines, the third offer for the financially troubled carrier.

Continental, which is operating under Chapter 11 bankruptcy protection, already has attracted a $350-million offer from Houston money man Charles E. Hurwitz and his company, Maxxam, as well as a $385-million proposal from a group led by Mexican investor Alfredo Brener.

In the latest offer, Air Canada and an investment group called Air Partners would provide $100 million in equity and would finance the rest by purchasing or placing $300 million of debt securities. In return they would receive a 58% equity stake and 65% voting interest in a reorganized Continental, the nation’s fifth-largest airline.

Air Partners is led by Texas investors David Bonderman and James Coulter, longtime associates of the wealthy Bass family of Ft. Worth. Air Canada, as a foreign airline, cannot own more than 49% of a U.S. airline’s stock or more than 25% of its voting shares.

“Continental has made great strides in establishing dependable and friendly customer service and continues to gain support from travelers,” said Hollis L. Harris, Air Canada’s president and chief executive officer who resigned as Continental’s chairman last year in a management shake-up. “It is a win-win situation since both companies will benefit from synergies in such areas as network coordination, information systems and maintenance.”

The offer drew mixed reviews from analysts.

Noting that Air Canada has posted losses for 2 1/2 years, Kevin Murphy of Morgan Stanley called the proposed combination a “merger of weakness.”

“What either party needs is a merger of strength,” he said.

“It’s like putting two drunks together to walk a sobriety line,” said Daniel A. Hersh of Kemper Securities. “The question is, can you put two companies that are really having trouble together and make one whole? I think the answer is no, but it doesn’t stop people from trying.”

But Rose Ann Tortora, an airline analyst with County NatWest USA, said she thinks the linkup makes sense, partly because the two ailing carriers are avoiding a traditional merger and all the problems and costs that brings.

“Hopefully, it’s a play on both’s strengths and not on their weaknesses,” she said.

Under the agreement, Air Partners would receive a 41% voting interest and a 29% equity interest. Air Canada would end up with a 24% voting interest and a 29% equity interest. Creditors and other parties would get 35% of the voting and 42% of the equity interest in Continental.

Air Canada and Air Partners would each account for five members of the 16 directors on the board.