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Bidding for Continental Draws at Least 2 Finalists

November 03, 1992|From Times Wire Services

HOUSTON — At least two investor groups met a Monday deadline to make formal bids for Continental Airlines, giving the carrier a choice between reorienting itself toward Canada or Mexico.

At the same time, Lufthansa German Airlines, which had shown an interest in making a formal bid with Los Angeles businessman Marvin Davis, dropped out on Monday.

After Lufthansa's withdrawal, Germany announced a new air traffic deal with the United States that could give the state-controlled German airline greater access to U.S. airports.

Air Canada and Aeromexico made their Continental bids in conjunction with U.S. investors to satisfy federal laws limiting how big a stake a foreign company can hold in a domestic airline.

Air Partners, a combination of Air Canada and Ft. Worth investors James Coulter and David Bonderman, entered a $425-million bid Monday, spokesman Owen Blicksilver said. He would not release any other details of the offer.

"We think it's a strong bid," Blicksilver said.

Aeromexico and Houston businessman Charles Hurwitz said they made a bid Monday, but would not immediately divulge its price.

Scott Lamb, spokesman for Hurwitz's Maxxam Inc., confirmed that the group had submitted the offer but would not release any details. The group had previously said it would put a $400-million bid on the table.

The various offers use different combinations of cash, equity and debt, and the winning bid will not be based on dollar figure alone, people familiar with Continental's selection process have said.

Continental would not say how many potential investors submitted offers in time for the 5 p.m. CST deadline.

Until Monday, four groups had been vying to take control of the Houston-based carrier and lead it out of Chapter 11 bankruptcy. But Monday morning, Lufthansa issued a brief statement saying it would not proceed with its offer to acquire Continental shares.

The company cited its review of Continental's financial, legal and operational status. Lufthansa, which has been trying to expand into the United States, said it was still willing to look at other strategic alliances.

Lufthansa and Los Angeles investor Marvin Davis had proposed a $400-million bid in September.

Alfredo Brener and his Houston Air Inc., a company set up to pursue the Continental acquisition, refused to say whether it had formalized its bid.

A brief statement issued by a public relations firm hired by the company cited the "future of Continental Airlines and the integrity of the bidding process" for not saying whether it had made a formal bid.

Houston Air had proposed a $385-million offer, but said it wanted to revise the bid. Houston Air said last month that Scandinavian Air Systems had agreed to join its bid, but SAS disavowed the claim.

Continental has been operating under Chapter 11 protection since December, 1990.

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