A
hedge fund with shares in both Delta and United sent a letter to
Delta urging the two airlines to merge, but Delta immediately tried
to quash the speculation that a deal is in the offing or has even
been discussed.
Delta did not,
however, brush off the general idea of a merger.
"There have been no
talks with United regarding any type of consolidation transaction,
and there are no such ongoing discussions," Delta CEO Richard
Anderson said.
But Anderson also
said that Delta had been "consistent in our public statements that
Delta believes that the right consolidation transaction could
generate significant value for our shareholders and employees and
that strategic options should be evaluated. With oil at over $90 a
barrel, this analysis takes on a heightened importance as we factor
those prices into our long-term planning process."
Prior to receiving
the letter from Pardus Capital Management, he said, Delta's board
had established a special committee to "work with management to
review and analyze strategic options to ensure Delta maintains its
leadership position."
Delta also has
retained financial and legal advisors to assist in the review and
in the development of recommendations.
United, for its
part, issued a statement that said: "We have said for the last four
years that we believe consolidation is necessary for the industry,
and others independently are reaching the same conclusion. We make
decisions in the best interest of United, and we don't comment on
the opinion of one shareholder, or the actions or hypothetical
transactions proposed by others."
As of Sept. 30
Pardus had a 4.8% stake in United parent company UAL Corp. with 5.6
million shares, and 2.6% stake in Delta with 7 million
shares.
According to
reports in the Wall Street Journal and New York Times, Pardus
argued in its letter to Delta that a merger with another carrier
was "imperative" and that United was the best option.
To
contact reporter Andrew Compart, send e-mail to [email protected].