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Delta, TPG Assessing Bids for American Airlines Parent
By GINA CHON, ANUPREETA DAS and MIKE SPECTOR

Delta Air Lines Inc. and private equity firm TPG Capital are separately assessing possible bids for American Airlines parent AMR Corp., with hopes that AMR's troubles presents another opportunity for airline consolidation, people familiar with the matter said.

AMR filed for bankruptcy court protection in late November and is in the midst of restructuring its debt and cutting labor costs after it. Any bid for AMR likely would come several months from now. AMR could use the bankruptcy process to shed a trove of obligations that a buyer might be hesitant to assume.

TPG Capital prefers to work with a strategic partner for a possible American Airlines investment, some of the people said. TPG, which has expertise in the airline industry, has approached AMR about its interest, they said.

Delta has hired Blackstone Group as its financial adviser to assess a potential AMR bid, people familiar with the matter said. Blackstone helped Delta restructure in its 2005 bankruptcy.

After its merger with Northwest Airlines in 2008, Delta became the world's largest carrier, meaning a deal with American would draw antitrust scrutiny. American is the nation's third-largest airline by traffic.

Delta has conducted an antitrust analysis on a possible tie-up with AMR and concluded that with some concessions, such a deal has a good chance of getting approval from regulators.

In a letter to employees in December, AMR's new chief executive, Tom Horton, hinted at speculation AMR might be the target of a takeover while in court protection: "And as we've seen before in this industry, there may be opportunists who wish to acquire our company," he said.

It's not certain that a deal will materialize. AMR has stressed it's focused on reorganizing and remaining independent. Also, it's not unusual for potential suitors to circle around a company in bankruptcy proceedings.

AMR is currently working on a business plan that it could brief creditors on sometime in the next three months, said a person familiar with the matter.

AMR and its various unions are also preparing for contentious labor talks that could take months to resolve.

TPG made its first investment in the airline industry in 1993 with Continental Airlines, which it helped turn around in the 1990s. TPG partner David Bonderman was chairman of Continental for a time. TPG was also a part of a consortium that tried to acquire Qantas Airways Ltd. but it didn't obtain the necessary shareholder approval for the deal in 2007.

TPG invested in America West International, which U.S. Airways Group Inc. acquired in 2005. TPG managing partner Richard Schifter was on the board of America West and was on the U.S. Airways board from 2005 to 2006.

TPG has past ties with American Airlines. In 2009, the private equity firm teamed up with AMR to possibly invest in Japan Airlines Corp. but the deal never came to fruition.