US Airways Group Inc. (LCC) said Wednesday it has made an $8 billion cash and stock bid for Delta Air Lines Inc. in a deal that would create one of the world's largest carriers. The move came despite Delta's repeated statements it isn't interested in a merger.

The offer to buy Delta once the Atlanta-based airline emerges from bankruptcy protection by the middle of 2007 would give Delta's unsecured creditors $4 billion in cash and 78.5 million shares of US Airways stock.

As it stands now, Delta's common shares are likely to end up worthless when it exits bankruptcy. In most bankruptcy cases, the debtholders usually end up with new shares of the company.

Doug Parker, chief executive of Tempe, Ariz.-based US Airways, said in a telephone interview that he is aware of the comments made by Delta's management in recent months, but he believes this is a fair offer and that ultimately Delta's creditors will see that.

"Delta is in bankruptcy and bankruptcy is a very open process," Parker said. "The process is designed so that the creditors get the highest possible value for their clients. Given that process, what we have done is gone public with an alternative to a standalone plan."

Delta spokeswoman Thonnia Lee seemed surprised by the announcement Wednesday morning and said she could not yet comment on it in detail. But she said Delta has consistently said that it plans "to emerge from bankruptcy as an independent airline."

Delta's chief, Gerald Grinstein, said as recently as last month that he had received "feelers" from UAL Corp.'s (UAUA) United Airlines about a possible merger 18 months ago, but that he quickly rejected them. He reiterated at the time that Delta has no plans for a merger.

US Airways also had been reported to be interested in Delta months ago, and it released letters Wednesday showing its previous communications with Delta.

Parker said a US Airways-Delta combination would have about 85,000 employees. He said he would anticipate flying with 10 percent fewer planes, but that doesn't mean job cuts.

"The plan is not predicated on any job cuts," Parker said.

Parker did not say why US Airways was moving now, but he did say the airline believes its offer is a good one.

"We expect it would prevail over any other bid if there were any," Parker said.

US Airways said it has received a financing commitment from Citigroup Inc. (C) to provide $7.2 billion in new financing for the deal.

This funding would be used to refinance Delta's debtor-in-possession credit facility, refinance US Airways' existing senior secured facility with GE Capital, and provide the funding for the $4 billion cash portion of US Airways' offer. All other allowed secured debt and administrative claims would be assumed or paid in full.

US Airways said the offer is a 25 percent premium over the current trading price of Delta's pre-petition unsecured claims as of Tuesday, and a 40 percent premium over the average trading price for Delta unsecured claims over the last 30 days.

If the deal is completed, the airline would operate under the Delta name and serve more than 350 destinations across five continents. Parker said he has not decided where the merged company would be based.

According to letters filed with the Securities and Exchange Commission, Parker originally had a conversation with Grinstein about a combination of the two airlines in the spring and followed up with a letter to Grinstein on Sept. 29.

In a letter to Parker dated Oct. 17, Grinstein said he and Delta's board "believe it would not be productive to engage in the type of exploratory discussions that you proposed at the time."

US Airways, which was created after US Air emerged from bankruptcy and was acquired by America West last year, said the deal is expected to generate $1.65 billion in annual savings from optimization of the airlines' complementary networks and combining facilities in overlap airports.

The deal would reduce unprofitable flying and improve the mix of traffic, US Airways said. The company's statement did not specify which airports would be affected.