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Texas Pacific Group looking at UA - What do you think this could mean 4 HP/US merger?

Texas Pacific Group looking at UA - What do you think this could mean 4 HP/US merger?

Old Jun 14, 05, 12:05 pm
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Texas Pacific Group looking at UA - What do you think this could mean 4 HP/US merger?

United Has Outside Buyer Interest
Monday June 13, 6:42 pm ET
United Creditors Indicate Interest From Outside Buyers As It Emerges From Chapter 11

CHICAGO (AP) -- Creditors at UAL Corp., parent of bankrupt United Airlines, for the first time have indicated that outside buyers have expressed interest in taking over the carrier as it emerges from Chapter 11.
<snip>

A news report Monday named Texas Pacific Group of Fort Worth and investor groups headed by two former airline chiefs, United's Gerald Greenwald and Continental's Gordon Bethune as the interested buyers. The report in Crain's Chicago Business cited industry sources and sources close to United. The weekly paper also reported that Thomas Buffenbarger, international president of the International Association of Machinists, Friday said that he was aware of interest from at least two outside investor groups.

http://biz.yahoo.com/ap/050613/united_buyers.html?.v=2


I saw this on Yahoo this afternoon and did a double take as I read it. Unless I'm mistaken Texas Pacific Group is currently the majority shareholder in HP. What do you think this means for the HP/US merger if TPG suceeds in acquiring UA? Do you think that eventually they would try and combine all three carriers?
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Old Jun 14, 05, 12:41 pm
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Originally Posted by wr_schwab
. . .I saw this on Yahoo this afternoon and did a double take as I read it. Unless I'm mistaken Texas Pacific Group is currently the majority shareholder in HP. What do you think this means for the HP/US merger if TPG suceeds in acquiring UA? Do you think that eventually they would try and combine all three carriers?
This is very interesting news, with lots of potential ramifications.

Yes, TPG currently is by far the largest shareholder, in AWA, with nearly 55% of voting control. They are not, however, named as a source of additional equity in the deal with US. I guess that's not surprising given the level of their current investment. Assuming they don't jump into the deal before it's done, their position in the new company will be dilluted and they will lose their controlling interest. They will still be a major holder, however, and one of their partners, Richard Schifter, sits on the AWA board. I'm not sure if he is expected to retain that seat in the new company. Either way, given such a large position, one would think that the two companies (UA and the new US) would have some level of cooperative relationship. It would be interesting to see if the same anti-trust concerns would be raised now that squashed the prior UA-US deal.

No doubt, with TPG having such a significant interest in both companies, things would be very interesting.
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Old Jun 14, 05, 1:48 pm
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My guess is that it won't happen

Hate to sound like a naysayer, but I don't think it will happen. Too many nasty issues and too tough of an environment.

I'm not a perfect prognosticator (else I'd make Warren Buffett look like a piker) but my gut says "nope, no way!"
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