What's up with this? Is CO sick of NW? Will they try to get their stock back, and then break up the alliance by paying the "breakup fee"? Could they be in 'secret' negotiations with another airline? Any thoughts?

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http://biz.yahoo.com/rf/000523/n23234812.html

Continental offers to extend Northwest alliance
HOUSTON, May 23 (Reuters) - Continental Airlines Inc. (NYSE:CAL - news) Chairman Gordon Bethune said on Tuesday the company had offered to continue its alliance with Northwest Airlines Corp. (NasdaqNM:NWAC - news) for ``15 to 20 years'' if Northwest relinquished its controlling voting stake in Continental.

Continental made the proposal as part of its continuing effort to buy back its shares from Northwest, which owns 14 percent of Continental but has a 51 percent stake in its voting stock.

Northwest and Continental -- the No. 4 and No. 5 U.S. airlines, respectively -- have a major code-sharing alliance that Bethune said has been a success.

``We responded with a number of proposals that might be acceptable to them, to ensure they would be able to work with us uninterrupted by outsiders for the next 15 to 20 years of our agreement. We would be willing to extend it for that length of time,'' Bethune said at the company's annual meeting.

``We're exploring ways we can buy our stock but still have reassurances they need that no one will break up what's a very profitable alliance,'' he said.

Northwest has balked at giving up its Continental shares, saying the stake provides insurance against Continental being taken over by another company.

Bethune said Continental wants the shares because leaving them in Northwest's hands ``creates uncertainty.''

``They're not necessary, they don't add value. We need to remove that,'' he said.

Bethune said Northwest had not yet responded to Continental's proposals. He declined to speculate about when the matter might be resolved.

``We continue to have hope we can settle this without the courts having to intervene and force some resolution,'' he said.


[This message has been edited by mat123 (edited 05-24-2000).]