UAL <UAL> MAY RESPOND TO PILOTS TODAY
UAL Inc may have a response this
afternoon to the pilots union proposal to buy its United
Airlines unit, a UAL spokesman said.
    "Obviously, we have a lot of movement in our stock, and we
need to get a clarification out," the spokesman said, adding
that there was a "50-50" chance a statement would be released
today.
    The pilots earlier this week offered to buy the airline for
2.3 billion dlrs, and assume 2.2 billion dlrs of existing debt.
    Takeover speculation has driven UAL's stock for several
weeks. UAL last month said New York Real estate developer
Donald Trump held a position in its stock, and that he also
held discussions with its chairman.
    The developer indicated in those talks that he took the
position as an investment, but he revealed no other plans.
    Today, rumors circulated that Coniston Partners were buying
UAL stock. UAL jumped five to 70-3/4 on volume of more than 3.2
mln shares.
    "United has got to consider this proposal. I think the
pilot's proposal is realistic. I don't exptect them to take it,
but it could put some interesting options in front of UAL
management," said Timothy Pettee, Bear Stearns and co analyst.
    Analysts have said UAL made itself vulnerable to attack
when it diversified away from its core airline. It added Hertz
rental cars, Westin and Hilton International hotels in a
strategy to become a travel service company.
    The strategy left its stock in a slump and its pilots union
concerned that the company was not focussing enough attention
on its airline.
    UAL has stood firm on its strategy. It is emphasizing its
new focus by changing its name to Allegis, as of May one.
    But takeover speculation has escalated, and Wall Street has
been busy calculating break up values well in excess of 100
dlrs per share. Traders today described the buying in UAL as
widespread, indicative to them that big institutions believe
the stock is in play.
    Market sources have said that although Trump attracted
attention to the stock, the pilots proposal acted as a
catalyst, kicking off a new round of speculation and perhaps
throwing the company into the hands of another buyer.
    "The first domino is you have an investor with a
considerable stake. the second domino is the union. That type
of attitude has been a precursor to airline deals in the past,"
said Pettee.
    "What's interesting is the values are there. There's
something for everybody," he said.

 Reuter
