A federal judge in Seattle yesterday denied Household Finance Corp. and would have barred Alaska Airlines and a recently spun-off subsidiary from making further purchases of Wien Air stock.
U.S. District Court Judge Donald S. Voorhees ruled that Alaska Airlines and Alaska Northwest Properties Inc., the subsidiary, had not made an unlawful tender offer for Wien stock, but he also agreed to the U.S. Court of Appeals.
Voorhees also ruled that the Civil Aeronautics Board was the proper body to investigate "HFC's and Wien's claim that the stock purchases also violated the antitrust law, and he postponed further proceedings pending the "cab's investigation.
On Monday, the CAB tentatively ruled that Alaska and ANPI violated the Federal Aviation Act by purchasing the Wien stock without seeking that a holding of 10 percent or more of an airline's stock by another air-line-related company presumes control, which requires CAB approval.
ANPI and Alaska Airlines contend that they are separate entities in no way connected now, a claim the CAB is wary of. While a subsidiary, ANPI used general coprorate funds from Alaska to purchase 20 percent of Wien's stock; it now has at least 28.3 percent. Alaska took actions to spin off the subsidiary last week, at which time its chairman and chief executive officer, Ronald F. Cosgrave, resigned to assume the same positions in the subsidiary.
The CAB gave Alaska and ANPI four days in which to show they have complied with provisions governing the acquisition and control of other airlines and have not engaged in unfair methods of competition; otherwise, they face CAB actions forcing divestiture of the Wien stock to less than a 10 percent interest in the company.
Several weeks ago, Wien directors turned down a $6.50-a-share bid from Alaska Airlines on grounds that the merger would violate the antitrust laws and voted instead to accept HFO's offer of $6 a share. It was later increased to $6.50.
Wien and HFC contend that Alaska Airlines' purchase of Wien stock through the subsidiary on the open market, combined with publicly stated intentions to acquire stock in its competitor, constituted a tender offer. Alaska Airlines contends that it owns no Wien stock and that the subsidiary is a minority shareholder in Wien through open-market purchases, not a tender offer.
HFO's formal tender offer of $6.50 a share was to expire yesterday, but the company extended its offer until Aug. 29 at 5 p.m. CST.