UAL Corp.'s directors have approved a buyout by a group of pilots and top executives that would make the parent of United Airlines the largest employee-owned company in the nation.
UAL announced Thursday night that it had signed a $300-a-share, or $6.75 billion, agreement with the labor-management group.The plan could end a six-week takeover battle at the nation's second-largest airline.
California investor Marvin Davis, who started the battle and eventually bid $6.19 billion, or $275 a share, for UAL, declined to comment immediately on the announcement. His spokesman, Jim Fingeroth, said Davis would respond later Friday.
A source close to the UAL takeover battle said Davis may still pursue his bid, despite the agreement with the management-labor group.
"I would not assume that this means it's over," said the source, who spoke on condition of anonymity.
The agreement was announced after the employee group made a presentation to a special committee of the UAL board and revealed the financing for the bid.
Frederick Dubinsky, a spokesman for United's unit of the Air Line Pilots Association, said he believes the plan will go forward.
"We bring something to the table that no one else can bring," Dubinsky said in a telephone interview early Friday from New York.
The pilot-management group's proposal includes a seven-year no-strike guarantee by the pilots and cuts in wages and benefits, terms that any outsider would have difficulty matching.
Under the agreement announced Thursday, Chicago-based UAL would merge with Airline Acquisition Corp., the group formed by pilots and management. Employees would own 75 percent of the company, UAL management would hold 10 percent and British Airways PLC would own 15 percent.
The deal still would need the approval of shareholders and the Department of Transportation, which is not expected to raise major objections although in the past it has been concerned about foreign carriers buying into U.S. airlines.