Some bondholders of Delta Air Lines Inc. are organizing an informal group to back US Airways Group Inc.'s $8.9-billion takeover offer for the bankrupt carrier, people close to the matter said Wednesday.
In conference calls Tuesday with Deutsche Bank AG and Lehman Brothers Holdings Inc., bondholders were urged to band together to pressure Delta to fully consider the US Airways bid and any other offers that arise, one person said.
The group is considering all options but could end up pressing Delta creditors to accept the US Airways bid, which faces skepticism from Delta's management and larger creditors, the person said.
A spokeswoman for Lehman and a spokesman for Deutsche Bank declined to comment.
Atlanta-based Delta has said it will review the bid, and meet creditors and US Airways representatives in the near future. It has also repeated, however, that it is still focused on emerging from bankruptcy as a standalone carrier.
One bondholder said he thought the sale of Delta to US Airways made sense.
"A combination of US Air and Delta would be better able to compete than both of them separately," said Edwin Farrell, analyst at 4086 Advisors, which owns Delta bonds. "If Delta is running more smoothly, bondholders are in a better position."
The No. 3 U.S. airline, which has operated under Chapter 11 since September 2005, has until Feb. 15 to exclusively file a plan of reorganization, though it expects to do so next month.
But if the new ad hoc committee gets enough bondholders to go along, they could submit their own plan and seek to have exclusivity terminated, said David Neier, an attorney who runs the bankruptcy practice with Winston and Strawn in New York.
"The market has already responded and validated the strength of the bid and the proposal we've put forward," said a US Airways spokeswoman, who declined to comment on the splinter group of creditors. (Additional reporting by Megan Davies and Paritosh Bansal)
