Icahn-backed group bids for TWA

Offer is made directly to airline's creditors, not bankruptcy court

March 06, 2001|By BLOOMBERG NEWS

NEW YORK - Trans World Airlines Inc. officials acknowledged yesterday that an investor group backed by former TWA Chairman Carl C. Icahn has made an offer for the struggling airline that bypasses the bankruptcy auction here and would allow it to keep flying as an independent carrier.

TWA Acquisitions Group, headed by investment banker Brian Freeman, said it submitted its $655 million offer to a committee of TWA's creditors Sunday and put down a $50 million deposit. The group is getting its financing from corporate raider Icahn, who controlled TWA from 1985 to 1993.

Since the Icahn-backed consortium didn't submit a proposal by last week's deadline, TWA isn't treating the offer as a legitimate bid, said Julia Bishop-Cross, an airline spokeswoman.

TWA officials weighed bids from AMR Corp. and other suitors at a bankruptcy auction yesterday in New York. The auction was adjourned and will continue tomorrow evening.

"They called us for information before the deadline, we gave it to them, and then they never submitted a bid," Bishop-Cross said.

AMR, American Airlines Inc.'s parent, is the only bidder that met deadlines and followed procedures approved by a bankruptcy judge in Delaware, TWA spokesman Mark Abels said on a conference call. TWA officials can still reject the bids, he added.

TWA and its lawyers will spend the next two days considering the offers for the airline, then recommend one of them at a hearing Friday, Abels said.

"We didn't think there was any purpose served in slamming doors when people still had a couple of days to put their bona fides on the table," Abels said.

AMR has offered $4 billion for TWA's assets. Competitor Jet Acquisitions Group of Scottsdale, Ariz., is offering $4.39 billion.

Along with Jet Acquisitions, Global Airlines Corp. also bid on TWA's planes and facilities by the Feb. 28 deadline, offering at least $450 million in cash and stock.

TWA, the No. 8 U.S. carrier, filed for Chapter 11 protection from creditors in January, in hopes of speeding its sale to American, which is ranked second behind UAL Corp.'s United Airlines Inc.

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