|
US Airways OK's takeover
|
 |
October 12, 2000: 1:25 p.m. ET
Shareholders vote overwhelmingly for UAL buyout; stock price still down
|
NEW YORK (CNNfn) - US Airways Group Inc. shareholders Thursday voted overwhelmingly in favor of the proposed $4.3 billion takeover by United Airlines parent UAL Corp.
At a special shareholders meeting in Washington, 98.5 percent of shareholders voted for the deal, which values US Airways at $60 per share. But US Airways shares have floundered well below that level, a sign that investors are skeptical the deal will be completed at current terms.
Federal legislators have raised several concerns that a merger between the world's largest carrier, United, and the No. 6 U.S. airline would lead to higher fares and fewer choices for consumers.
 Shares of US Airways rose 6 cents to $31.44 in midday trading on the New York Stock Exchange.
Anticipating antitrust concerns because of their strength at Washington, D.C.'s three area airports, the two carriers have announced a new airline called DC Air will serve 44 destinations from Reagan National Airport.
Arlington, Va.-based US Airways (U: Research, Estimates) board member and Black Entertainment television founder Robert Johnson agreed to pay $141 million for the gates and landing rights to establish DC Air, but critics have said the price is too cheap and Johnson is not a sufficiently experienced or independent buyer.
Continental Airlines entered the fray Monday by making a bid for DC Air.
Houston-based Continental (CAL: Research, Estimates) is offering $215 million for the airport gates, flight slots and other assets that would be split off if the United-US Airways deal is completed.
In a statement released Thursday, US Airways reiterated the importance of the creation of DC Air for the proposed merger.
United has not yet set a date for a shareholders vote.
United's pilots, who own 25 percent of the company, said they would not vote for the merger before a contract agreement is reached.
In late August United agreed to a new labor contract with the union that puts the pilots' wages 10 to 12 percent ahead of the industry leader, but the union has not made any further statement about whether it will vote for the merger.
Shares of UAL (UAL: Research, Estimates) fell $1.12 to $38.44. 
-- from staff and wire reports
|
|
|
|
|
|
United
US Airways
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
