The company that owns United Air Lines said yesterday that it intends to sell a 50 percent interest in its computerized reservation system along with its other nonairline subsidiaries, the Hertz Corp. and the Westin and Hilton International Hotel chains.
The board of Allegis Corp., which has spent most of the year fending off takeover attempts and rumors, said it will move quickly to sell everything but the airline at prices that will produce a quick cash payout to shareholders and that will allow the airline to operate debt-free.
The board also rejected a proposal by the airline's pilots to acquire the carrier. Other employe groups have opposed the idea of pilot control.
The board announced the decisions and several major personnel changes at the end of a day-long meeting. The plan was outlined in a letter to shareholders by Allegis Chairman Frank A. Olson, who took over earlier this month when former chairman Richard J. Ferris resigned after a decision by the board to dismember the integrated travel service corporation.
Olson said the board would move as "expeditiously as possible" to sell Hertz and the hotel chains, which have been valued at about $3 billion, and an interest in the computerized booking system, which is valued at about $1 billion. At those prices, the sales could generate about $60 a share for stockholders -- about the same amount Ferris had proposed to pay shareholders in an earlier plan.
United's Apollo/Covia reservations system has the second-largest number of travel agency and airline office subscribers in the industry, second only to American Airlines' Sabre system. The subscribers pay a fee for using the system, which allows them to book hotel rooms, rental cars, airline reservations and other services through one computer.
Among the personnel changes announced yesterday was the resignation of James J. Hartigan as president and chief executive of United, although Hartigan will remain as the airline's chairman. Olson assumed the jobs vacated by Hartigan.
In addition, the company announced the resignation of John L. Cowan, Allegis's vice chairman and chief financial officer. He will be replaced by William Sider, chief financial officer of Hertz.
A committee will begin a search for a chief executive for the airline, Olson said. Two candidates who have been mentioned are Stephen Wolf, chairman and chief executive of Flying Tiger Line, and John R. Zeeman, executive vice president of Allegis.
Olson also said the company will seek to smooth its troubled relations with United employes. He said the company will seek concessions from its workers, but none that would result in wages and benefits as low as those of its lowest-cost competitors.
A spokesman for the pilots union, meanwhile, said it intended to pursue employe ownership of United. "We are totally committed to making this the best airline in the country and making it 100 percent owned by all its employes," said spokesman Jim Waters.
Olson said nothing about who the bidders might be for the businesses Allegis wants to sell. Marriott Corp. and Chicago's Pritzker family have held discussions on a joint buyout of Allegis, although they are interested only in the hotels.
Analysts have said that Hertz might be acquired by its management in a leveraged buyout.