Word: icahn
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Dates: during 1980-1989
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Before the drama of hijacked Flight 847 began to unfold last Friday, executives of Trans World Airlines were preoccupied by an equally riveting, corporate development: the birth of a huge new airline company. TWA, which has struggled for the past month to escape Corporate Raider Carl Icahn, agreed to be acquired by Texas Air Corp., which already owns Continental and New York Air. The merger will create the second largest U.S. airline, after United...
Meanwhile, Chrysler announced that it might acquire Gulfstream Aerospace, an aircraft manufacturer, for some $640 million. Finally, Trans World Airlines continued to fend off a hostile bid from that hungry raider, Carl Icahn, who holds more than 26% of the outstanding TWA shares. The airline's executives might try a leveraged buyout, which would involve management's borrowing money to purchase the company. But Eastern Airlines has said that it was considering a bid for TWA. According to Wall Street slang, TWA is now "in play." Stay tuned...
...will not be greeting Icahn with a friendly "welcome aboard." Said President C.E. Meyer: "Mr. Icahn's presence is uninvited and undesirable." TWA has just begun to recover from nearly a decade of turmoil that culminated in the February 1984 spin-off of its lucrative hotel and food-service divisions into a separate company. The airline posted earnings of $29.9 million in 1984, its first profit in four years, partly the result of cutbacks in its jet fleet and work force. TWA remains the No. 1 carrier on transatlantic routes, which are highly profitable. But losses on domestic flights, where...
...Icahn has made no formal bid to take control of the company, but he has had private meetings with TWA officials. At first the raider suggested that TWA should abandon many domestic routes and sell off parts of the airline. But he quickly backed away from that proposal after TWA officials contended it would not be feasible because the airline needs its domestic routes to feed passengers into its overseas flights. Wall Streeters doubt that Icahn will be successful in overhauling TWA. They point out that he would run into a maze of regulatory and financing problems. Said one industry...
...Uniroyal wrangle, company officers managed to fend off Icahn by attracting a friendly merger offer from a Wall Street investment firm, Clayton & Dubilier. The firm, which plans to raise $748 million for the deal, offered $22 a share, vs. Icahn's hostile bid of $18. Icahn, who amassed most of his 9% Uniroyal stake in April, withdrew his offer, promising not to increase his holdings for six months. It is not the first time Icahn has been foiled. He made an unsuccessful pass at Phillips Petroleum two months ago, and in the past has been fended off in raids...