Delta seen putting its value up to $12B

NEW YORK (CNNMoney.com) -- Trying to fend off a hostile bid from US Airways Group, Delta Air Lines is close to presenting a reorganization plan to the bankruptcy court that will estimate its value as an independent company at between $10 billion to $12 billion, according to a published report.

The Wall Street Journal reports that the plan could be presented to the court as soon as Tuesday. US Airways offered stock and cash for Delta on Nov. 15 that would be worth $8.4 billion, based upon Friday's closing price.

Delta Air Lines (tail in front) hopes to hold off a hostile bid by US Airways (tail in rear) by valuing the company at $10 billion to $12 billion as a stand-alone carrier in its reorganization plan, according to a report.

The Delta (Charts) reorganization plan would lower the range for the estimated market value of the Atlanta-based carrier after emerging from bankruptcy, down from the $12 billion to $14 billion range the airline was calculating a few weeks ago, according to the report.

Still, the paper says Delta management hopes creditors would prefer a plan that values the airline at more than US Airways' offer, and that would lead to an airline with an estimated $10 billion in debt versus $22 billion under the merger scenario envisioned in the US Airways (Charts) bid, according to the report.

Delta management has repeatedly stated its intention to emerge from bankruptcy as an independent airline. But it has yet to formally reject the US Air offer. The paper reports that it will do so as soon the reorganization plan is filed in U.S. Bankruptcy Court in New York.

One person familiar with the matter said Delta's plan won't offer as much cash as the $4 billion in the US Airways offer and instead will depend upon equity in Delta for the majority of its value to creditors.

US Air officials insist their offer is more attractive to Delta creditors due to what it estimates are $1.65 billion in annual cost savings and increased revenue opportunities from a combined carrier.

The bid from US Air for Delta set off speculation that it could bring a round of mergers in the industry. Last week there were reports that United Airlines parent UAL Corp. (Charts) was in preliminary talks with Continental Airlines (Charts) on a potential merger. And even smaller carriers could get involved, as AirTran (Charts) announced an unsolicited bid for Midwest Express (Charts).

If airline mergers fly, fares could follow