Is CO sick of NW?
 

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).]

This is not new. It's been around for a while that Bethune doesn't want NW to have the controlling stake in CO. Basically, CO wants to be able to do what it wants.

No, CO does not seems to be tired of its NW alliance, either. Now HP, that maybe another thing altogether.

There's been a rather longstanding rumour that they want to repurchase their stock to take the company, CO, private! http://www.flyertalk.com/forum/smile.gif

As noted, they are not tired of them- but I know quite a few CO FF's who've been pax on NWA recently who are! http://www.flyertalk.com/forum/wink.gif

I'm pretty sure that Gordon's letter in this month's Continental Magazine (the one they give away in the seat pocket) stated unequivocally that Continental wanted to purchase the stock back from Northwest.

So it's not a rumor.

I'll try to confirm that when I fly BOS-SFO tomorrow and post something here (unless someone else beats me to it).

http://biz.yahoo.com/apf/000525/airlines_a_2.html


The UAL and US Air thing has put all this talk under a microscope. The latest rumor is that American will go for Northwest, and Delta will go for CO. There is also a rumor that NW will just buy up CO, but I've heard that NW doesn't have the strength to do that on their own.

I'd like to see a NW - CO merger, but with CO management in control (ie, Bethune!) http://www.flyertalk.com/forum/smile.gif


PS
http://dailynews.yahoo.com/h/nm/2000...irways_15.html


This article says that NW - DL are a more likely tie... This whole thing is all mucked up!




[This message has been edited by mat123 (edited 05-25-2000).]

I fear a CO - DL merger or Northworst buying CO - DL is at the BOTTOM of my service rankings as well as on time perentages...

That being said - I'd take a DL alliance with CO any day of the week before I'd like a NW buyout....

The quote saying that they want to buy back the stock from NW is in the letter from Gordon and the annual report. The annual report is a very interesting read.

But trust or not, now Continental is negotiating to buy back part or all of Northwest's stake, even though it wants to keep the alliance because it helps feed passengers to both carriers. At the same time, a U.S. Justice Department suit aimed at blocking the whole deal is still pending.
http://www.latimes.com/business/2000...000050497.html