Icahn may seek partner for TWA bid

Tuesday, Jan. 16, 2001 | 11:32 a.m.

SUN STAFF AND WIRE REPORTS

DALLAS -- Carl Icahn, the billionaire financier who formerly ran Trans World Airlines Inc., may be trying to line up partners for a rival bid against American Airlines' deal for the financially ailing carrier's assets.

Icahn's attorney, Edward Weisfelner, told the Dallas Morning News he would not reveal the identity of any third party his client has contacted to join his bid.

"The ground rules ... make it awfully difficult to afford a competing bid," Weisfelner told the newspaper.

Fort Worth-based AMR Corp., the parent company of American Airlines, announced last week it had agreed to pay $500 million and assume responsibility for $3 billion in TWA's aircraft leases in a deal for most of TWA's assets.

The deal would help American keep pace with the nation's largest carrier United Airlines, which is seeking regulatory clearance for its deal for US Airways.

A judge last week rejected Icahn's proposed alternative to American's offer of emergency financing for TWA which sought bankruptcy protection last week.

AMR officials declined to comment on Icahn's reported moves. A final hearing on the company's loan to TWA will occur Jan. 27.

Icahn's Las Vegas company Lowestfare.com holds a 99-month contract to buy more than $610 million worth of TWA tickets at discounted prices, but American has indicated it does not plan to honor the contract. Also in Las Vegas, Icahn owns the Stratosphere resort on the Las Vegas Strip and the two Arizona Charlie's locals-oriented hotel-casinos.

Weisfelner told the newspaper that Icahn would contest protections granted AMR, including the $75 million breakup fee the company would receive if its agreement to acquire TWA is not completed.

He said Icahn also plans to file a lawsuit against AMR quickly to protect his ticket contract from being voided as a result of TWA's bankruptcy filing.

TWA agreed to the contract in exchange for a loan made during the mid-1990s. Airline experts said last year the arrangement was "killing" TWA as it tried to return to profitability.

Icahn took TWA private in 1988, saddling the airline with $540 million in debt.

archive