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Don't yell at me, I just report the news.......

Southwest in play? It's a possibility

08:55 AM CDT on Thursday, April 19, 2007
By TERRY MAXON / The Dallas Morning News
[email protected]

Southwest Airlines Co. is ripe for a leveraged buyout, with its high profit, unencumbered assets and low debt, one airline industry observer said Wednesday.

Analyst Roger King of CreditSights projected a possible market value of $15 billion, or $19 to $20 a share, for Southwest. Its shares, which have traded between $14.50 and $18.20 over the past year, closed up 46 cents Wednesday at $15.66.


In a report, Mr. King called a leveraged buyout of Dallas-based Southwest "a no-brainer in the current financial market. Airlines are in play all over the place."

Southwest "in particular has a multiyear fuel hedge portfolio, billions in unencumbered aircraft values, a significant [Boeing] 737 order book, excellent long-term operational and financial trends, industry tailwinds and upside potential as temptations," Mr. King said.

He cited one possible roadblock, saying the company would have to turn its philosophy 180 degrees to accept a buyout.

"Herb Kelleher [chairman since 1978] does not even have a grave to spin in yet," he said.

A Southwest spokeswoman declined to comment, but she noted a similar rumor circulated in February.

Speaking on CNBC, Mr. King said the Southwest speculation was "not a joke, and I'm not crazy."

http://www.dallasnews.com/sharedcont...1.3666689.html

HSLD

Reminds me of the Joke:

Q: "How do you make 10 Billion dollars in the aviation business?"

A: "Start with 100 Billion".

1Seat 1Engine

Since culture and philosophy is what the company values most, I don't think it's going to happen.

Ellen

EXACTLY!

If AAI (Air Tran) cannot pull of buying MEH (Midwest) I highly doubt that anyone will be able to buy SWA.

Flyby1206

Doubtful, any airline who can finance $15billion to buy SWA already has a domestic network(AA,US/AWA, CAL, DAL). The growth now is international. There is also no point in a buyout from private equity, since SWA is already a financially solid company and doesnt need to be repaired and then re-IPOed.

Jet Jockey 2003

Oh contrau, my friend. That is better then the broken ones. They don't have to investment $ beyond the buying part to fix it. If they(company being bought) have a large amount of assets(i.e. airplanes, expensive employees, etc.) that are paid for or close to it, then they can make $. Take company private, finance deal w/ aircraft, collect large mgmt/consulting fees(read make back our initial investment) in between, re-IPO after making it look pretty(read take $ from work groups), make out like pigs in $hit. This is just a new form of LBO'S

Just look at what Lorenzo and Ichan did in the 80's to the airlines, very similar just a different financing arm these days(private equity). So no shareholder/SEC oversight, you can work the books anyway you want to.

just my .02 cents

pete2800

My thoughts exactly. I don't see this happening.

Flyby1206

Good point, but I think in general the financial institutions are scared of airlines in general, and are focusing their $$$ to other safer sectors. We shall see!

av8r4aa

Never happen!

flaps 9

I hope so