Delta rejects US Airways offer

No. 3 U.S. airline contends that it's worth more as a stand-alone carrier, says federal regulators would not approve $8.4 billion merger with US Airways.


NEW YORK (CNNMoney.com) -- Delta Air Lines formally rejected the hostile bid from US Airways Group early Tuesday, saying that the Atlanta-based carrier is worth more as a stand-alone carrier and that regulators are unlikely to approve the combination.

Since US Air made its $8.4 billion stock and cash bid for Delta on Nov. 15, Delta management has stated that it intends to emerge from bankruptcy as an independent carrier.

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Tuesday's statement from Delta says that its financial advisor, The Blackstone Group, has estimated that Delta will be worth about $9.4 billion to $12 billion when it emerges from bankruptcy. It said it plans to emerge from bankruptcy in the spring of 2007, but said that emergence would be delayed until 2008 if the merger went forward.

The company also said that there are 2,000 routes where a combined US Airways and Delta would control 90 percent of the flights, which the company argues would prevent U.S. antitrust regulators from agreeing to the deal.

Delta also argued a combined US Air-Delta would have $23 billion in total debt, compared with about $10 billion in total debt for a standalone Delta. Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.