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AMR investigating legitimacy of buyout offer

Published 03/30/2011, 01:00 PM
Updated 03/30/2011, 01:04 PM
AAL
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* AMR investigating buyout offer

* Says has never heard of Sterling Global Holdings

CHICAGO, March 30 (Reuters) - AMR Corp , parent of American Airlines, said it was investigating the legitimacy of a reported $3.25 billion buyout offer from a company called Sterling Global Holdings.

AMR confirmed it received a letter from Sterling Global on Wednesday, but said "at this time we have no corroborating information to demonstrate the offer described in the letter is legitimate."

"Prior to receiving the letter, AMR had never heard of Sterling Holdings," AMR said in a statement. "We have not been able to confirm whether Sterling Global Holdings is a shareholder of AMR."

The airline declined to confirm details of the offer, which local media reported as worth $3.25 billion. The Fort Worth Star-Telegram published an interview with Al Weintraub of Sterling Global, quoting him as saying he was interested in taking AMR private.

Reuters efforts to contact Sterling Global were fruitless.

Talk of buyouts in the U.S. airline industry have been common as airlines struggle to regain stability after the recession drained travel demand.

AMR, in particular, has been at the center of such speculation. Formerly the world's largest airline company, AMR has been on the sidelines while rivals Delta Air Lines and United Continental Holdings found merger partners and overtook AMR in size.

Talk of a possible bid for AMR, however, boosted the company's shares about 4 percent to $6.85 on the New York Stock Exchange in early Wednesday afternoon trading. Airline shares were broadly higher, with the Arca airline index <.XAL> up 1.7 percent.

"Assuming the bid is a true bid or trustworthy ... it would makes sense they would all go up," said Morningstar analyst Basili Alukos.

Demand for AMR calls in the options market was well above normal on Wednesday, options traders and analysts said. (Reporting by Kyle Peterson and Doris Frankel; Editing by Tim Dobbyn)

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