Icahn May Be Planning TWA Bid, Report Says

Carl Icahn, the billionaire financier who formerly ran Trans World Airlines Inc., is reportedly trying to line up partners for a rival bid against American Airlines’ offer for the financially ailing carrier’s assets.

Icahn’s attorney, Edward Weisfelner, told the Dallas Morning News in Tuesday’s editions that he will not reveal the identity of any third party his client has contacted to join his bid.

“The ground rules . . . make it awfully difficult to afford a competing bid,” Weisfelner said.

Fort Worth-based AMR Corp., the parent company of American Airlines, announced last week it had agreed to pay $500 million and assume responsibility for $3 billion in TWA’s aircraft leases in a deal for most of TWA’s assets.

The deal would help American keep pace with United Airlines, the nation’s largest carrier, which is seeking regulatory clearance for its deal with US Airways.

A judge had rejected Icahn’s proposed alternative to American’s offer of emergency financing for TWA, which sought bankruptcy protection last week.

AMR officials declined to comment on Icahn’s reported moves. A final hearing on the company’s loan to TWA will occur Jan. 27.

Icahn holds a 99-month contract to buy more than $610 million worth of TWA tickets at discounted prices, but American has indicated it does not plan to honor the contract.

Weisfelner said Icahn would contest protections granted AMR, including the $75-million breakup fee the company would receive if its agreement to acquire TWA is not completed.

He said Icahn also plans to file a lawsuit against AMR to protect his ticket contract from being voided as a result of TWA’s bankruptcy filing.

TWA agreed to the contract in exchange for a loan during the mid-1990s. Airline experts said last year the arrangement was “killing” TWA as it tried to return to profitability.