US Airways has made a formal merger proposal to American Airlines parent AMR and its creditors that could value the combined airline at around USD$8.5 billion, according to a person familiar with the situation.Under the all-stock proposal US Airways made in mid-November at a meeting with AMR's unsecured creditors committee, the bankrupt airline's creditors would own 70 percent of the merged company and US Airways shareholders 30 percent, the person said.US Airways and AMR are currently negotiating toward a potential merger agreement that could come as soon as January, the person added, asking not to be named because the matter is not public.At the same time, AMR is still pursuing a plan to emerge from bankruptcy proceedings as an independent airline, which will be compared against the merits of a merger with US Airways, the person said.The combined AMR and US Airways could have a value similar to Delta Air Lines, which has a market capitalisation of around USD$8.6 billion, the person said.Representatives of AMR, US Airways and the creditors committee all declined to comment. Source: Reuters
Gravity always wins!