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A New York investment banker Monday launched a $650 million bid to purchase Trans World Airlines Inc., delaying the close of an auction of the bankrupt St. Louis carrier’s assets. TWA said it would reconvene the auction Wednesday at the New York offices of its bankruptcy counsel, Kirkland & Ellis. The delay gives the carriers’ lawyers more time to consider a last-minute offer from TWA Acquisition Corp., a newly formed company led by investment banker Brian M. Freeman, as well as competing offers from three other investment groups. “We are taking a few more days to evaluate what these folks have put on the table,” said Mark Abels, a TWA spokesman. TWA still plans to present the winning bid to the U.S. Bankruptcy Court in Wilmington, Del., Friday. Freeman’s group is trying to beat an offer from AMR Corp. to buy most of TWA for $500 million in cash, including $200 million in emergency financing. Fort Worth, Texas-based AMR, parent of American Airlines, has also agreed to assume most of TWA’s nearly $6 billion in debts and aircraft leases. TWA Acquisition said it too would assume many of TWA’s debts and that it would give the company $375 million in emergency financing to replace AMR’s funding. Freeman, who is vice chairman and executive vice president of UNext.com, a Deerfield, Ill.-based online education company, is no newcomer to the airline industry. He was a financial adviser to the International Association of Machinists in the bitter feud with Carl Icahn, the New York dealmaker who sold the airline in 1993. The bid from TWA Acquisition, which would keep TWA independent, is financed by Icahn. The offer preserves the ticket-purchase agreement that lets the financier buy more than $610 million in TWA tickets at high discounts. TWA has said the agreement has forced down its fares and has asked the bankruptcy court to terminate the pact in its entirety. The group also includes Ralph O. Hellmold, chairman of the Private Investment Banking Co. of New York, and David Treitel, chairman of the air travel consultancy Simat, Helliesen & Eichner Inc. Icahn would own no stock in TWA, but Treitel would report to Icahn, Abels said. Freeman did not return calls. Representatives for Icahn have said the financier decided to become involved after the International Association of Machinists and Aerospace Workers, which represents 16,000 of TWA’s 21,000 employees, announced it would oppose AMR’s bid for TWA. But Joseph Tiberi, an IAMAW spokesman, said Monday that the union will oppose any offer involving Icahn. At issue for the IAMAW is that its workers would not receive the same pay and benefits as American’s workers during a five-year transition period during which TWA will operate as a subsidiary of AMR. “If we can get that straightened out, I’m sure we can get something worked out,” Tiberi said. Three other groups presented bids Monday. Jet Acquisitions Group Inc. bid $889 million for most of TWA’s assets, and Global Airlines Corp. offered $450 million for the airline. Galileo International Inc., a Rosemont, Ill.-based company that operates an electronic reservation system, has offered $220 million for TWA’s 26 percent stake in Worldspan LP, which runs an electronic reservation system. AMR’s offer is the only one that conformed with the bidding procedures approved in February by the bankruptcy court, Abels said. Jet Acquisitions and Global Airlines both failed to deposit $50 million in an escrow account, as required. TWA Acquisition also failed to make the security deposit, though Abels said the group was expected to do so this evening. Atlanta-based Worldspan said in a statement Monday that Galileo’s bid is “little more than a ploy.” Worldspan believes Galileo is attempting to discourage travel agents from switching to its system, a source close to the company said. If the court approves its bid, Galileo also must get permission to buy TWA’s stake from Worldspan’s three owners — TWA, Delta Air Lines Inc. and Northwest Airlines Corp. Copyright (c)2001 TDD, LLC. All rights reserved.

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