US Airways holds to 8.4B offer

US Airways continues to back its plan for taking over Delta.
ATLANTA (AP) -- US Airways has no intention right now to increase its 8.4 billion offer for Delta Air Lines and it can't see itself backing out of its pursuit of Delta for any reason, Chief Executive Doug Parker said Thursday.
In a wide-ranging telephone interview with Associated Press reporters, Parker said Tempe, Ariz.-based US Airways Group Inc. firmly believes that its offer for Atlanta-based Delta Air Lines Inc. provides more value than Delta's stand-alone plan.
"We believe our offer is more than fair and don't feel any need to amend it at this point," Parker said.
At the same time, Parker did not exactly rule out the possibility of changing his mind about the offer price.
"If these conversations move to negotiations about value, we're happy to have those conversations," Parker said. "We have not had those types of conversations yet."
Asked if there is any way US Airways would drop its hostile bid for Delta absent Delta's creditors' committee saying it wasn't interested, Parker indicated he didn't see any.
"We think this is such a unique opportunity that we have an obligation to pursue it, and because of that obligation, we will pursue it and believe we will be successful," Parker said. "So, no, I can't envision any scenario where we simply say, 'We change our mind. We don't think there's the value here and we're going home."'
Delta's statement
Delta issued a statement Thursday similar to one it issued Dec. 21. It said it is moving forward with its stand-alone reorganization plan because it believes its plan provides creditors with "superior value as well as a faster recovery and much greater certainty of execution" than any competing proposal. Delta said nothing Parker has said recently changes that belief.
Parker's comments came as lawyers for Delta, the nation's third-largest carrier, said Wednesday they have scheduled a Feb. 7 hearing in bankruptcy court to consider approval of the disclosure statement to the carrier's stand-alone reorganization plan.
The disclosure statement includes details on Delta's operations. If the statement is approved, that means Delta can begin soliciting votes on the reorganization plan, which typically takes four to eight weeks, Delta spokesman Michael Freitag said.
Delta is seeking to establish Feb. 1 as the date by which persons who want to vote on the reorganization plan must be creditors of the airline.
Parker said in Thursday's interview that if the hearing Delta has scheduled goes forward, it could create some urgency to US Airways' hopes of buying Delta, because US Airways is hoping to consummate the deal before Delta emerges from Chapter 11.
"If we start moving to the point where there are things put in front of the court that are inconsistent with our proposal, yeah, you'll see the urgency pick up," Parker said.
He did not elaborate on what US Airways might do if that happens.
Parker said he is convinced that, despite the position of Delta management and its employees against the proposal, Delta will eventually come around and that Delta's creditors will support US Airways' offer.
"What I believe is they will come to the same conclusion that the public holders of their bonds have come to, which is that our proposal is worth a lot more than the stand-alone plan," Parker said.
Bond prices rsie
Delta's bond prices have increased since US Airways' offer. They increased further after Delta filed its stand-alone plan.
Delta has said it projects it will be worth 9.4 billion to 12 billion if it emerges from Chapter 11 as a stand-alone carrier, but US Airways has disputed Delta's valuation, saying it is unrealistic and much too high.
As for where a merged US Airways-Delta would be based, Parker insisted that US Airways has made no decision.
"We genuinely don't know," Parker said. "This is not an issue of we know and we're not saying. The biggest part of the reason we don't know the answer and won't know the answer for a long time is because I'm not sure what the management team looks like when we're done with this."
Delta faces the bid by US Airways that was first disclosed to the public on Nov. 15, even as Delta's reorganization plan calls for Delta to emerge from Chapter 11 by the middle of next year as a stand-alone carrier.
US Airways is hoping Delta's creditors force Delta's hand in its direction.