Eastern Sale to Ueberroth Snags at 11th Hour
FORMER baseball commissioner Peter Ueberroth's deal to buy strikebound Eastern Airlines has hit last-minute snags for the second time in a week, but negotiations have not ended. A source familiar with the negotiations said the parties reached an accord Tuesday night and were set to make the announcement Wednesday. But the deal began to unravel Wednesday morning, as Mr. Ueberroth believed Texas Air Corporation chairman Frank Lorenzo was again changing the agreement, the source said.
Texas Air is the parent of Eastern, which has been virtually shut down since March 4, when the machinists union went on strike and pilots and flight attendants refused to cross picket lines. Five days later, Eastern filed for protection from creditors in US bankruptcy court in New York.
Ueberroth began what he thought would be final talks with Mr. Lorenzo Wednesday in New York. Talks continued till about 8 p.m. The source said talks were continuing.
Sources close to the Houston-based Texas Air, however, said that Ueberroth himself raised minor sticking points that kept the deal from being consummated.
``Ueberroth is the one who is nit-picking the deal to death,'' said a source, who also demanded anonymity.
Under its latest offer, the investor group led by Ueberroth would pay $450 million to $500 million for Eastern and would receive a minority interest in Texas Air's computer reservations system, the New York Times reported yesterday. The reservation network, System One, is made up of the former systems of Eastern and Continental Airlines, also owned by Texas Air.
Eastern also would forgive substantial debt owed it by Texas Air, the Times said.
Texas Air spokesman Art Kent in Houston said the company had no comment on the negotiations.
Ueberroth's group made a $464 million offer for Eastern last week and then withdrew the bid after being told by Texas Air that it had been topped by another suitor, identified as billionaire hotel executive Jay A. Pritzker.
Many union leaders and rank-and-file members have said that they would accept wage and benefit concessions to help resurrect Eastern if they were given independence from Texas Air, which acquired the carrier in 1986 for about $600 million.
Lorenzo has been vilified by Eastern workers as a union-buster who was stripping the 60-year-old airline of its assets and funneling them to Continental, which is substantially nonunion.
``We're ready to go back to work under someone who is not interested in tearing down the airline,'' pilot Ron Fletcher said at a rally of more than 500 people Wednesday outside Eastern's offices in Miami.
``Money is not really the issue. What we want to know is that Eastern has a future.''