Texas International Airlines yesterday formally asked the Civil Aeronautics Board for approval to acquire control of National Airlines.
TXI, is an aggressive, federally-regulated regional airline serving nine western and southern states, acquired about 9.2 percent of the stock of the larger carrier in open market transactions just over two weeks ago.
Yesterday, TXI said it would continue purchasing National shares - up to a total of 25 percent of the outstanding shares - pending board approval of its takeover plan.
In the meantime, it said, it plans to place its current and future holdings in National in a voting trust under the aegis of the United States Trust Co.
[But the CAB immediately warned that the takeover effort violated federal regulations, United Press International reported.]
[The CAB considers acquisition of 10 percent of an airline's stock to constitute control. Although TXIA's 9.2 percent purchases few below that figure and thus did not require federal approval, the CAB felt it was close enough to warrant an investigation, UPI said.]
[TXIA President Francisco Lorentzo asked the CAB to approve the 25 percent acquisition, but said the airline intended to go ahead with the purchase while awaiting the boards' decision.]
In a related filing with the Securties and Exchange Commission, TXI disclosed that it may use general corporate funds or borrowed funds, as well as the proceeds of a public offering outside the United States of up to $25 million of convertible debentures, to purchase the additional National shares.
While its intention is to seek to acquire control of National, TXI said yesterday it hasn't formed "a plan relating to the specific actions it may take to accomplish that objective."
National is a coast to coast airline with several international routes.
It is unclear how many shares would be needed to acquire control of National. Because the Federal Aviation Act requires prior CAB approval of transactions which would result in the control of an airline, an industry lawyers must believe that 25 percent doesn't constitute control. However, one provision in the law suggests that an owner of 10 percent or more of the stock is "presumed to be in control."
TXI officials declined to discuss what it might take to control National, and a spokesman for National said he didn't know. There are about 8.6 million outstanding shares of National; TXI now holds 790,000 shares. National chairman L. B. Maytag is the largest individual stock-holder, with 317,000 shares. He also is trustee for another 68,000 shares in a trust.
National officials yesterday had no comment on TXI's announcement except to say they had had no discussions with TXI. Maytag couldn't be reached for comment.