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Friday, February 19, 1999
"It is far more impressive when others discover your good qualities without your help." -- Judith Martin (a.k.a. Miss Manners)
United to Buy America West?
In what could be another acquisition in the rapidly consolidating airline industry, United Airlines parent UAL Corp. (NYSE: UAL) reportedly has made a conditional cash bid for America West Holdings (NYSE: AWA). The Wall Street Journal reported that the nation's largest airline made an offer at an unknown price Wednesday that could end up sparking a bidding war between UAL and Continental Airlines (NYSE: CAI.A), which holds an 8% stake in the Phoenix-based America West and the right of first refusal to buy a controlling stake in the company in the event of an acquisition bid.
On Jan. 20, UAL issued a short statement confirming it had expressed interest in acquiring America West, the nation's ninth-largest airline. That same day, America West disclosed that it had been contacted by "a number of airlines expressing interest in possible transactions ranging from a strategic alliance to a merger or similar business combination." The company added that it would have no further comment until it actually entered into an agreement or decided not to do so.
Meanwhile, Delta Air Lines (NYSE: DAL), which had also been interested in acquiring America West, quietly removed itself from the running, according to the Journal. On Tuesday, Delta announced it would acquire ASA Holdings (Nasdaq: ASAI), the parent company of Atlantic Southeast Airlines, a Delta Connection carrier, for around $700 million in cash.
The United offer expires in two weeks. One thing going for a possible United-America West linkup is that pilots for both airlines are represented by the same union, the Air Line Pilots Association, and flight attendants at both are represented by the Association of Flight Attendants. This could mean that United wouldn't face the same problems that caused last week's sick-out by AMR's (NYSE: AMR) pilots over American Airline's acquisition of Reno Air (Nasdaq: RENO).
News to Go
Telecommunications equipment company Ciena Corp. (Nasdaq: CIEN) surprised Wall Street by reporting fiscal first quarter earnings of $0.02 a share, as new customers jump-started sales. The company had been expected to report a loss of $0.01 a share.
The maker of razors and batteries Gillette Co. (NYSE: G) announced that Chairman and CEO Alfred Zeien will retire April 15 after an eight-year tenure and 31 years of working for the company. He will be succeeded by Gillette President and COO Michael Hawley, a 36-year veteran of the company.
Charlotte-based bank First Union Corp. (NYSE: FTU) said it plans to cut 3,600 to 7,200 jobs, or 5% to 10% of its workforce, this year after forecasting slower earnings growth last month. The bank will record a one-time charge, which will be "substantially" offset by a $150 million to $200 million gain from the sale of an investment in Electronic Payment Systems Inc., which agreed to be acquired by EFS Inc.
Men's footwear maker Florsheim Group (Nasdaq: FLSC) announced it has hired Bear, Stearns & Co. as its financial adviser "to evaluate and recommend financial and strategic alternatives," including "merger opportunities, recapitalization, strategic alliances and other financial structures." The company said it is looking for new capital to help accelerate growth.
Check out this week's StockTalk interview with DoubleClick CEO and co-founder Kevin O'Connor... Louis (TMF Seymor) continues his musings over e-commerce... Daily Double: Premier Parks.
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