Northwest's Offer Heads South

It looks as though Northwest Airlines' common stock offering isn't going to sail through after all. In January, the carrier, which narrowly averted bankruptcy last year by swapping 30% of its equity in exchange for $886 million in employee cost cuts, announced it would sell 20 million shares of common stock. The target share price: $20. But sources close to the deal now say $20 is a nonstarter. They expect Northwest to soon announce it will take $13 a share. Some industry observers expect $10 is more likely. What happened? Investors have been spooked by the industry's rough first quarter, and don't buy the notion that Northwest has recovered.

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