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TPG Said to Study AMR Investment as US Airways Adds Advisers

TPG Said to Study AMR Investment as US Airways Hires
American Airlines Inc. and US Airways Group Inc. planes sit on the tarmac at Ronald Reagan National airport in Washington on Nov. 29, 2011. Photographer: Andrew Harrer/Bloomberg

David Bonderman’s TPG Capital is studying whether to invest in American Airlines parent AMR Corp. in bankruptcy, and US Airways Group Inc. has hired advisers to assess a possible bid, people familiar with the matter said.

TPG’s review remains in the early stages, and no decisions have been reached about whether to take an AMR stake or buy the company outright, said one of the people, who asked not to be identified because the talks are private. US Airways also hasn’t made any decisions, said another person.

AMR became the last major full-service U.S. airline to file for bankruptcy when it sought court protection on Nov. 29. The Fort Worth, Texas-based company has exclusive rights for a minimum of 120 days to as long as 18 months to submit a plan of reorganization, keeping any unwelcome suitor at bay.

“It will be the middle of the year before we see anything definitive come out on these things,” Robert Mann, president of aviation consultant R.W. Mann & Co., said in an interview.

Delta Air Lines Inc. hired Blackstone Group LP to help study options for AMR, according to another person familiar with the matter. Spokesmen for American, US Airways and Delta all declined to comment.

Delta gained 3 percent to $8.87 at the close in New York trading, while Tempe, Arizona-based US Airways rose 2.4 percent to $6.05.

Traffic Rankings

AMR, whose American is the third-largest U.S. airline, sought Chapter 11 after annual losses that began in 2008. Atlanta-based Delta is the world’s second-largest carrier by traffic, after vaulting past American by buying Northwest Airlines Corp. in 2008, while US Airways is No. 5 in the U.S.

US Airways is the airline cited most often by analysts as a potential American merger partner. Delta may be interested just in assets that AMR might shed while in Chapter 11 protection, said Mann, who is based in Port Washington, New York.

TPG is “among the usual suspects” for possible airline investments, and may be assessing whether to get involved with AMR alone or with a partner, said Mann, a former American executive.

The Fort Worth-based firm has had a close relationship in the past with US Airways, and Bonderman, 69, is now chairman of Ryanair Holdings Plc after holding that post at Continental Airlines Inc. in the 1990s.

Airline Investments

Formerly known as Texas Pacific Group, TPG bought Continental out of bankruptcy in 1993 and invested in Midwest Air Group Inc., America West Holdings Corp., Tiger Airways Pte and Ryanair. The firm backed a failed takeover bid for Australia’s Qantas Airways Ltd. in 2007 and lost an attempt to acquire US Airways in 2002.

TPG worked with American in 2009 on an offer to pump $1.1 billion into Japan Airlines Co. to help avert bankruptcy and keep Delta from luring the carrier out of the Oneworld alliance. While Japan Airlines eventually restructured in bankruptcy, it stayed in American-led Oneworld. The investment never occurred.

Lighthouse Holdings Inc., which is owned by investment funds affiliated with TPG and Pharos Capital Group LLC, bought 90 percent of AMR’s American Beacon Advisors Inc. in 2008. AMR sold Beacon, which manages $57 billion in assets, for $480 million.

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