bloggingbuyouts

The board and management of Continental Airlines (NYSE:CAL) have decided that staying single is the best way of life. After long merger talks with United (NASDAQ:UAUA), Continental has elected to go it alone.

Continental may still enter a "code sharing" alliance with one or more airlines so that customers can have common ticking across more than one carrier.

The decision is based on the premise that airline mergers created nightmarish customer service problems which drive fliers to the competition. It is a sound position and calls into question the wisdom of Delta's (NYSE:DAL) merger with Northwest (NYSE:NWA).

While industry marriages may allow for the cutting of some routes and personnel, they can lead to labor relations headaches including strikes by employees who are trying to keep their jobs. The hook-ups also do nothing to solve the more pressing problem at all airlines--rising fuel costs.

The rest of the story is at 24/7 Wall St.

Who would have imagined that the Delta (NYSE: DAL) merger with Northwest (NYSE: NWA), which was announced yesterday, could be scuttled by a merger of Continental (NYSE: CAL) and United (NASDAQ: UAUA)?

Most Wall St. observers believed that the unions were the largest barrier to the Delta deal. The pilots have not given the marriage their imprimatur. The captains may be able to hurt the merger by threatening a strike which could shut down the new carrier. Regulatory questions could be the other roadblock, but, as Reuters points out, "While the U.S. Justice Department is expected to work carefully, the agency's track record on consolidation favors approval."

If the airlines can solve their labor issues, the merger, meant to offset the rise in fuel prices and fall in passenger revenue, is likely to happen.

Read the rest of the story at 24/7 Wall St.

The revived merger between Delta (NYSE:DAL) and Northwest (NYSE:NWA) is based on the premise that, in a airline industry depression, two carriers mashed together work better than if they remained independent. It is an argument which is half again too clever but has no merit to speak of.

According to The Wall Street Journal "The deal could value Northwest at roughly $3 billion, these people said, though terms were still being negotiated. That would be well below Northwest's market value of more than $4.6 billion as of Feb. 1, reflecting the industry's worsening prospects in recent weeks." The airline industry has been keelhauled to the extend that United (NASDAQ:UAUA), Northwest, and Delta have lost over 30% of their market caps in three months.

The two significant stimulations for airline mergers now are rising fuel prices and a likely sharp drop in passenger demand as the economy slows. Since a merger will not be effective finished for several months, neither of these is addressed in the short-term.

For the rest of the story go to 24/7 Wall St.

Childrens Place Retail Stores, Inc. (NASDAQ: PLCE) is seeing shares surge this morning by some 20% as a Fed Filing shows that former CEO/Chairman Renee Dabah is trying to take his 17.2% stake up to a full buyout at $24.00. With a 52-week trading range of $14.92 to $58.89. you can imagine some holders will be fighting this as a "take-under".

Jerry Yang's email to employees yesterday sure sounded like he was leaving an out for him to accept the Microsoft Corp. (NASDAQ: MSFT) acquisition of Yahoo! (NASDAQ: YHOO). Interestingly enough, Alley Insider has some alternatives in mind for Yang to pursue.

It would be expected that Jeff Bewkes, CEO of Time Warner Inc. (NYSE: TWX) is watching the earnings out of EarthLink Inc. (NASDAQ: ELNK) from this morning and will be watching United Online Inc. (NASDAQ: UNTD) tonight. If the internet access operations of AOL are up for grabs, these may be a source of value determination.

The proposed merger of BHP Billiton (NYSE: BHP) and Rio Tinto plc (NYSE: RTP) just looks like it has too many hurdles to overcome, despite a hiked bid. China and Japan are both against it, and the company would just be too darn big.

IAC/InteractiveCorp. (NASDAQ: IACI) sure sounds like it wants to pursue a total five-way break-up despite outside efforts to unseat Barry Diller as CEO.

Bankrate, Inc. (NASDAQ: RATE) announced two smaller acquisitions when it gave earnings.

Are Delta Air Lines Inc. (NYSE: DAL) and Northwest Airlines Corp. (NYSE: NWA) getting ready to announce merger(s)?

Carl Icahn boosted his stake in Motorola, Inc. (NYSE: MOT) in a filing yesterday. He's going to need more than stock buybacks and a handset unit sale to dress this pig up for prom.

Is Anheuser Busch (NYSE: BUD) about to make a merger with another brewer? You can imagine that regulators will be scrutinizing this one.

Jon Ogg is an editor and partner of 247WallSt.com.

There has been plenty of buzz lately about merger activity among the major airlines. The latest thought is that Delta Airlines, Inc. (NYSE: DAL) and Northwest Airlines Corporation (NYSE: NWA) will join forces in a battle against record-high fuel and other challenges to the industry. But despite the positive effect some feel consolidation may have on the airline sector, passengers are still facing stressful travel.

Crowded gates and cramped airplane seats. Delayed flights. The struggle to reduce one's toiletry kit to a series of three ounce portions. And it is only getting worse. A report in the New York Times reported that big airlines are cutting down on domestic capacity in 2008 and raising ticket prices while they are at it. For every $10 increase in a barrel of oil, airlines are forced to lift round-trip fares by an average of $18 (and who can blame them?). Black gold is currently hovering close to the $100 level; about a year ago, it was close to $50. In sum, air travel will be more expensive, and just as crowded (if not more so). In 2007, jets were already more crowded than they'd ever been, and posted the highest-ever percentage of late arrivals. Of the seven major carriers, all but Southwest Airlines Co. (NYSE: LUV) and Continental Airlines, Inc. (NYSE: CAL) reduced domestic capacity in 2007. United Airlines, of parent company UAL Corporation (NASDAQ: UAUA) expects to lower its domestic flight roster by 3% to 4% this year, and DAL plans to shave 4% to 5% of its current domestic flight offerings.

Adding insult to injury the Times reminds us: "Because full flights cause airlines all sorts of operational problems, travelers should also brace for continuing problems with delays and misplaced bags."

Since moving north to Chicago, I've become a quick fan of Amtrak. The seats are extremely roomy, you can walk around whenever you want, the food isn't bad, and there are outlets at every seat so I can work or watch DVDs throughout the ride. Tickets are cheap, and the service is pretty reliable. What isn't reliable are the timetables: a commuter ride to St. Louis gets in at a decent hour, but other destinations pull into the station in the middle of the night. And forget about the train if you're looking to go more than a few hundred miles. Until we have a better rail system, most of us are just stuck flying the decreasingly friendly skies.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Delta Airlines Inc. (NYSE: DAL) -- volatility at 54; DAL names former Northwest Airlines Corp. (NYSE: NWA) leader Richard Anderson as CEO, sparking merger talk. DAL closed at $17.71. Bear Stearns says, Anderson "could facilitate consolidation," and "complementary international routes and limited domestic overlap could make for a compelling case of DAL & NWA." Delta's unsecured creditors rejected a hostile takeover bid by US Airways (NYSE: LCC) on 1/31/07. DAL over all option implied volatility of 54 is above its 16-week average of 49 according to Track Data, suggesting larger price risk.

NYMEX Holdings Inc. (NYSE: NMX) -- volatility Up; NMX says it had talks regarding potential combination. NMX closed at $118.78. NMX says, "the company has talked to certain parities regarding a potential business combination." NMX goes on to say "that any transaction would have to be at a meaningful premium to the company's current share price." NMX over all option implied volatility of 52 is above its 26-week average of 37 according to Track Data, suggesting larger risk.

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

In another lap tray to the belly, customers of Milwaukee-based Midwest Air Group (NYSE: MEH), repeatedly named as one of the nation's best airlines for customer service and comfort, learned today that the airline will be purchased by a group led by TPG Capital. The investor group includes Midwest's competitor Northwest Airlines (NYSE: NWA), which is reviled by passengers for its cattle-car seating, lack of timeliness and failure to understand the concept of customer service

The acquisition offers little in the way of synergy to the two airlines. They duplicate many routes, and Midwest flies the Boing 717, while Northwest uses 747s and 757s. What the deal does accomplish is to block the expansion of a potential competitor in Northwest's upper midwest routes. While the deal secures the present management of Midwest, I suspect it's just a matter of time before the malaise reaches Milwaukee.

Midwest has been fighting off suitor Airtran Holdings' (NYSE: AAI) hostile takeover attempt, which reached $15.75 and $389 million before it folded its cards late last week. TPG, which grew out of the Continental Airlines (NYSE: CAL) takeover in 1993, is offering $16 per share, or over $400 million, to take the company private. The Midwest board voted Sunday to go forward with the TPG offer, and an agreement is expected by midweek.