There appeared to be no stopping Texas International Airlines yesterday in its bid to spoil the proposed merger of Continental and Western Airlines as a first step in taking over Continental itself.
The Houston-based airline announced late in the day that it had already purchased about 5,250,000 shares of Continental's common stock -- at a cost of about $68.3 million. The purchases are part of TI's continuing offer to buy 6 million shares at $13 a share. With the 1,452,000 shares it had already acquired, the new purchases gave Texas International about 43.6 percent of the outstanding stock of Continental.
It appears likely that by Thursday, the day Continental shareholders are scheduled to meet in Los Angeles to vote on the airline's proposed merger with Western, TI might own the full 6 million shares. If it does, it will own about 48.5 percent of Continental's common stock.
Under a voting trust arrangement approved by the Civil Aeronautics Board last week, TI plans to use the shares to vote against the proposed Continental-Western merger. There is little doubt the TI vote could defeat the merger proposal.
At least so far, Continental has lost all its attempts to thwart TI's efforts:
The CAB denied its request for a 10-day delay in the board's decision allowing TI to buy Continental's shares and use them to vote against the Western meger. Continental had asked for the stay so that its employe groups would have time to make a counteroffer for the Continental stock. The CAB said it had no statutory basis to interfere with the TI tender offer.
A U.S. Court of Appeals in Washington also denied Continental's request for a stay of the CAB's order.
A federal court in Los Angeles turned down its request to enjoin the stock purchases based on alleged securities law violations.