US Airways on Tuesday ruled out returning with a fresh bid if Delta Air Lines emerges from bankruptcy as a standalone carrier, in a last-ditch attempt to rally creditor support for its hostile offer.
Delta’s official creditors’ committee is expected to vote on Wednesday on the merits of the competing plans for the third-largest US carriers by revenues, amid intensifying efforts by bondholders to push Delta to the negotiating table.
Doug Parker, US Airways’ chairman and chief executive, also ruled out extending the deadline set for the committee to accept its negotiating conditions “beyond midnight Phoenix time” on February 1.
Mr Parker expressed impatience with the lack of signals from the official committee, which acts as an effective gatekeeper for the progress of both the US Airways’ bid and the standalone Delta plan. “If they can’t do that, we’re quite happy taking care of our own debtors,” he said, adding that he had not had recent contact with Gordon Bethune, the former Continental Airlines head advising the committee.
He said an ad hoc committee of Delta bondholders was getting “more and more agitated” about the Atlanta-based carrier’s refusal to open up its books to US Airways.
Mr Parker said the nine-member official committee “knows exactly what they have to do. If they don’t do it, we’re gone.”
US Airways’ effort to create the largest airline in the world triggered discussions among six of the country’s seven biggest carriers, and is being closely monitored for any signal that regulators would permit deals.
Mr Parker said the blocking of its Delta offer would probably mean there would be no consolidation until the next industry cycle.
He said any move on a post-bankruptcy Delta was “probably not one we would be interested in,” as it would lose many of the potential synergy benefits.
Delta on Tuesday added a heavyweight line-up of six banks to provide exit financing and explicit support for its effort to thwart the bid: JPMorgan, Goldman Sachs, Merrill Lynch, Lehman Brothers, UBS and Barclays Capital would provide $2.5bn in funding.
US Airways has already secured $8.3bn in funding from Citigroup and Credit Suisse, which could provide an additional $1bn to sweeten the existing offer and persuade Delta creditors to push the carrier to the negotiating table.