Global Airlines to Offer $1.8 Billion for US Airways
A holding company that tried but failed to buy Trans World Airlines Inc. this year is launching an offer for US Airways Group, which called off its $4.3-billion merger with United Airlines on July 27.
Global Airlines Corp. of New York said Sunday it will offer $1.8 billion, or $27 a share in cash and stock, for Arlington, Va.-based US Airways and assume nearly $8 billion in debt.
Shares of US Airways were up 8 cents to close at $16.88 in trading Friday on the New York Stock Exchange. The offer represents a 60% premium for US Airways.
“This is a real deal,” John Scott, a spokesman for the privately held Global told the Associated Press on Sunday.
David Castelveter, a spokesman for US Airways, said the company had no comment about Global’s offer.
Global had offered to buy TWA in March, but analysts dismissed the bid as irrelevant.
Under the terms of the offer, Global would acquire all 67.1 million outstanding shares of US Airways for $10 per share in cash and an additional $17 per share in Global nonvoting Class B stock, which would be registered and traded on the New York Stock Exchange under the symbol GAC if the deal goes through.
The offer is valid until midnight today, but Scott said it could be extended. He said that if US Airway’s board of directors doesn’t respond to the offer, Global will move forward with a tender offer to US Airways’ shareholders no later than Sept. 4.
United’s parent, UAL Corp., and US Airways are the second- and sixth-largest U.S. airlines, behind No. 1 AMR Corp.’s American Airlines, which recently purchased the assets of Trans World Airlines. The Justice Department said the merger would have given United a monopoly or duopoly on nonstop service on more than 30 routes and substantially limit competition on numerous other routes.
As part of the termination agreement, UAL will pay US Airways $50 million.
Scott said Global has asked for early termination from the Justice Department and expects regulatory approval from the Transportation Department and the Federal Aviation Administration.
