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US Airways, AMR Talks Said to Intensify as Deadline Looms

Published 08 Feb, 2013

US Airways Group Inc.’s merger talks with bankrupt American Airlines are intensifying as the sides try to agree on control of a combined company before confidentiality accords expire next week, people familiar with the matter said.
 
No decisions have been made on how ownership would be split between creditors of American parent AMR Corp. and US Airways investors or who would lead the carrier, said four of the people, who asked not to be identified because the discussions are private.
 
A deal would create the world’s largest airline, vaulting it past the rivals that eclipsed American amid a consolidation wave during the past decade. A combined carrier would be valued at almost $13.1 billion, according to Dan McKenzie, a Buckingham Research Group Inc. analyst in New York.
 
“The merger solves US Airways’ international network problem and creates a better combined entity,” James Corridore, a Standard & Poor’s equity analyst, said in a note to investors today.
 
The possible merger gained support late last month from an ad hoc group holding $1.5 billion in unsecured AMR debt, people familiar with the matter said then.
 
The bondholders are pushing for a deal by Feb. 15, the expiration date for non-disclosure agreements they signed with the two airlines. Talks may still falter, and there is no guarantee of a merger announcement by then, the people said.
 
Read the full article from Bloomberg.

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