Continental chairman leads investors in bid for America West

February 26, 1994|By New York Times News Service

The board of America West Airlines has endorsed a bid from an investment group led by the chairman of Continental Airlines, David Bonderman, to help the carrier emerge from bankruptcy.

Mr. Bonderman, along with other investors that include Continental Airlines, Mesa Airlines and Fidelity Investments, offered $220 million for a 37.5 percent stake in America West, which has operated under Chapter 11 bankruptcy protection since June 1991. The board accepted the bid late Thursday night.

The bidding process is not over, as other bids may yet be submitted for consideration by U.S. Bankruptcy Judge Robert G. Mooreman.

Other interested investors have included a group led by Michael Steinhardt, the New York money manager who unsuccessfully lobbied America West's board Thursday for acceptance of its offer of roughly $200 million for 49 percent of the Phoenix-based airline.

The leading bid from the group, AmWest Partners, is significant because of its potential to link the route networks of America West and Continental. The group said it has no plans to merge the airlines but that they would become marketing partners and coordinate schedules and frequent-flier programs.

The $220 million bid for America West comprises $120 million in cash and $100 million in unsecured debt.

It also calls for AmWest Partners to get 37.5 percent of the reorganized company's stock, unsecured creditors to receive 45 percent, an unidentified secured creditor to get 7.5 percent and current America West shareholders to receive 10 percent.

Yesterday, America West's stock jumped 62.5 cents, to $2.875, in Nasdaq trading.

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