UAL Shares Plunge as Buyout Hits Snag
CHICAGO — UAL Corp. stock plunged today amid speculation that lenders may force employees to seek an extension of the Aug. 9 deadline for financing their $4.38-billion buyout of the company, the parent firm of United Airlines.
The union-led employee group might also have to ask UAL’s board and stockholders to accept less than the currently proposed $201 per share, analysts said.
UAL tumbled almost $18 to $139 a share on the New York Stock Exchange, extending Monday’s more than $6-a-share drop as new reports circulated that banks might be balking at lending money for the proposed purchase of United Airlines’ parent company.
The trade publication American Banker said in today’s editions that Citicorp and Chase Manhattan Corp. representatives did not attend a meeting Friday on possible bank financing for the UAL deal.
The newspaper also quoted sources as saying Citicorp had withdrawn for the time being from a bank group negotiating with the employees over financing.
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