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UAL Stock Soars on Pilots' Renewed Interest in Bidding

July 08, 1989|From Reuters

CHICAGO — Pilots for UAL Corp., parent of United Airlines, said Friday that they were considering a bid for the airline as UAL's stock price soared on growing speculation that the company was an acquisition target.

UAL shares, up $35 in the past three weeks, rose $13.50 to close at $166, with 1.7 million shares changing hands, making it the second most heavily traded issue on the New York Stock Exchange. At its current stock price, UAL is worth more than $3.6 billion.

Speculation that UAL might be taken over was triggered by the $3.6-billion acquisition of NWA Inc., parent of Northwest Airlines, on June 19, analysts said.

The gains and recent heavy volume in UAL suggest that the stock is under accumulation, they said. But no bidders have stepped forward.

Because UAL has fewer than 22 million shares outstanding, the stock movement has been magnified, with 5% or more of the shares changing hands daily.

Texas billionaire Robert M. Bass, Los Angeles investor Marvin Davis and Pan Am Corp. have all been mentioned as potential bidders for UAL. Davis and Pan Am were spurned by NWA.

United's 7,000-member Air Line Pilots Assn., which played a large role in forcing UAL to restructure in 1987, said it is considering revising a $110-a-share conditional bid it made for the company two years ago.

On Friday, the pilots said they were again interested in UAL. "We have been in constant communication with our financial advisers and our attorneys. Our interest has piqued," said Rick Dubinsky, chairman of the master executive council of the Air Line Pilots Assn. "We are back at work to try to come up with another opportunity."

Rick Dubinsky, chairman of the master executive council of the Air Line Pilots Assn., declined to specify a possible price for a revised bid but acknowledged that it would have to be significantly higher than the pilots' earlier offer.

UAL spokesman Joe Hopkins declined comment.

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