US Airways Withdraws Hostile Bid for Delta Air Lines

Delta Air Lines Inc.'s official creditors committee said Wednesday it will support Delta's standalone reorganization plan, rejecting US Airways' (LCC) hostile bid to buy Delta. US Airways responded by withdrawing its offer.

The committee said in a statement its decision was reached after a lengthy review of both Delta's proposal and US Airways' proposal.

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The creditors committee is a key constituency in Delta's Chapter 11 case. It's decision prompted US Airways to immediately withdraw its nearly $10 billion offer.

US Airways had asked for support from the committee, and set a deadline of Thursday.

Delta has said it projects it will be worth $9.4 billion to $12 billion when it emerges from bankruptcy by the middle of this year. Its management had said repeatedly it wanted to remain on its own and not merge with US Airways.

The official creditors committee said in its statement that it "has determined that it will support the standalone plan of reorganization as finally agreed upon between Delta and the Creditors Committee that will be filed later this week."

"The Creditors Committee reached this determination after engaging in extensive discussions with representatives of Delta and US Airways over the last two months and upon consideration of the advice of the Creditors Committees legal, financial and industry advisers," the statement said.

The statement added, "In reaching this decision, the Creditors Committee considered a variety of factors, including, but not limited to, valuation of, the timing and the risks associated with, and the likelihood of a successful consummation of the US Airways proposal and the plan."

The committee said it will work with Delta to confirm Delta's plan.

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