AMR to Proceed With Planned Eagle Spinoff
“Both companies believe this is strategic to their long- term success, so we are expecting it to move forward as planned,” Roger Frizzell, American’s vice president of corporate communications, said in an e-mail today.
AMR tumbled 32 percent through yesterday after directors agreed July 20 to divest Eagle, probably through a spinoff. The slump for the Fort Worth, Texas-based company was twice as much as the drop in the Standard & Poor’s 500 Index in the same period and the worst in the Bloomberg U.S. Airlines Index.
Separating from Eagle would let American seek other bids for regional flying while allowing the commuter unit to work for other airlines. A regulatory filing for a spinoff should come this month, and the deal may close this year, according to AMR, which hasn’t disclosed terms such as the distribution of stock.
AMR rose 35 cents, or 11 percent, to $3.68 at 12:23 p.m. in New York Stock Exchange composite trading, after touching $3.83 for the biggest intraday gain since September 2009. The stock fell 57 percent this year through yesterday.
American plans to keep about $2.5 billion in debt and Eagle’s aircraft to improve the smaller carrier’s viability, a person familiar with the plan has said. American will lease the planes to Eagle for a token amount, said the person, who wasn’t authorized to speak publicly.
To contact the reporter on this story: Mary Schlangenstein in Dallas at email@example.com
To contact the editor responsible for this story: Ed Dufner at firstname.lastname@example.org