Fund Group May Seek US Airways’ Sale

Tiger Management, the hedge fund group run by Julian Robertson and the largest shareholder at US Airways Group Inc., said it may seek a sale or merger of the airline to rebuild its value after a year of slumping stock performance.

Robertson-managed funds hold a 22.4% stake in Arlington, Va.-based US Airways, whose shares have lost half their value in the last year and hit a 52-week closing low Friday. Shares rose $2.88 to close at $38.50 Monday on the New York Stock Exchange.

The decline comes as Chairman Stephen Wolf leads US Airways through several major changes, including increased international flying, the expansion of its MetroJet service, and the purchase of new aircraft.

In a Securities and Exchange Commission filing, Tiger said the share price doesn’t reflect the strength of US Airways’ franchise and that it’s exploring options that could include a “merger, sale or recapitalization.”

Still, a sale of US Airways isn’t likely, said Tom Longman, an analyst with Arnhold & S. Bleichroeder, who rates US Airways a “buy.”

US Airways spokesman John Bronson declined to comment. The company, which has a market capitalization of $2.84 billion, has a price-earnings ratio of 7.7, making it a cheaper stock than rivals UAL Corp., the parent of United Airlines, at 10.1 or American Airlines parent AMR Corp. at 11.3.

Wolf took the helm at US Airways in January 1996 and laid out plans to cut costs, which were the highest in the industry, allowing the carrier to purchase hundreds of Airbus Industrie planes.

Last month, US Airways reported a 30% drop in second-quarter profit and said earnings for the second half of the year won’t meet expectations.