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Braniff Seeking OK of Unions in Pan Am Takeover Attempt

November 26, 1987|Associated Press

DALLAS — Braniff Inc. has presented a formal proposal to union leaders of Pan American World Airways in the latest move in Braniff's attempt to acquire the international carrier.

Jay A. Pritzker, chairman and controlling stockholder, is negotiating his plan with union leaders and has kept Pan Am management up to date on a takeover proposal.

Pritzker has submitted a written offer to acquire the airline to Pan Am management.

Pritzker, whose family owns 94% of Braniff's voting stock, reportedly is seeking about $200 million in wage concessions annually over three years in exchange for a 20% stake in Pan American World Airways.

'Bargaining in Good Faith'

"He is seeking employee concessions first and certain economic arrangements with the union before he formalizes his intent," said one union representative who asked that he not be identified. "We are bargaining in good faith."

Pritzker said Tuesday that talks are progressing at all levels of the corporation.

"Either it will develop into serious negotiations or it will fall by the wayside. It's hard to say right now," Pritzker said. "If it were to become serious, I think it would happen within a month."

Pritzker has outlined a plan to Pan Am's unions and investment advisers under which the airline would be spun off from its parent and merge with Braniff. Pan Am shareholders would get stock in a new company and non-voting shares in Braniff, while Pan Am workers would get the 20% stake in the new company.

The labor coalition negotiating with Pritzker includes the Teamsters, flight attendants, pilots, flight engineers, mechanics and other unions except Transport Workers Union.

Pan Am has extensive international routes spanning from Europe and Africa to South America.

Pan Am lost $469.3 million in 1986 but was profitable for much of 1987 because of European travel and higher fares.

Another Suitor

On Monday, another potential Pan Am suitor, Towers Financial Corp., indicated in a Securities and Exchange Commission filing that it planned to make a tender offer for control of the airline.

Towers Financial indicated it would make a tender offer for control of Pan Am Corp. by offering Pan Am shareholders a new issue of preferred stock in Towers with a 6% dividend.

The New York-based debt-collection and insurance holding company has been publicizing its plans for a takeover for weeks, but a number of analysts and Pan Am's financial advisers have questioned whether it had the backing to finance a takeover.

Towers said in its SEC filing it owns about 100,000 Pan Am shares.

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