Saudi Buys 5% Stake in TWA

Trans World Airlines Inc. said Wednesday that Saudi Arabian Prince al-Waleed bin Talal bought 5% of the company’s shares, expanding his vast worldwide holdings with a bet that the struggling airline’s stock will prove to be a bargain.

The prince, one of the wealthiest men in the world and a nephew of Saudi’s King Fahd, bought about 2.1 million shares on the open market and said he doesn’t plan to buy any more shares, TWA said. Al-Waleed’s stake is worth about $14.6 million based on TWA’s current stock price, a small fraction of his estimated $10-billion financial empire.

The prince has done well with previous investments in faltering companies, including Citicorp and Euro Disney. Still, analysts didn’t interpret his TWA move as a sign of brighter prospects for the airline.

Shares of St. Louis-based TWA gained 12.5 cents to close at $7 on Wednesday.

Dennis McKechnie, an analyst at Columbus Circle Investors, suggested al-Waleed bought the stock because it’s a bargain. The shares traded as high as $23.125 last April.

“I guess this means that at least somebody thinks it’s going higher,” said McKechnie, whose firm, with 1 million shares, ranked at the end of 1996 as TWA’s second-largest holder.

Neither the prince nor his spokesmen could be reached for comment.

Plagued by high maintenance costs and the aftershocks of the fatal crash of Flight 800 last summer, TWA reported a loss from operations of $170.3 million and a final loss after charges of $258.6 million, or $5.53 a share, compared with a final loss of $27.8 million, or 84 cents a share, in the year-earlier period.