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Icahn Still Potential Bidder for Eastern, Paper Says

November 8, 1988

NEW YORK (AP) _ Financier Carl Icahn, the chairman and owner of Trans World Airlines Inc., still is considering making a bid for ailing Eastern Airlines after abandoning an earlier effort, according to a published report.

The Washington Post, in today’s editions, quoted TWA General Counsel Mark Buckstein as saying a bid by Icahn for Eastern is ″a possibility.″

Last month, Icahn broke off efforts to acquire Eastern, after failing to structure a deal that would satisfy the airline’s militant unions.

Texas Air Corp., the parent of Eastern, recently agreed to sell Eastern’s profitable shuttle service to developer Donald Trump for $365 million in cash.

Buckstein told the Post that an Icahn bid for the rest of Eastern would depend on the financier’s ability to conclude favorable labor contracts at TWA and on working out an agreement with Eastern’s unions.

Icahn said in a statement issued Monday that the best way for TWA to achieve needed growth is through acquisitions, although he did not specifically mention Eastern.

″There was no question TWA must grow to thrive, and ... by far the most preferable way for the airline to grow is through acquisitions,″ he said.

TWA announced Monday that its president, D. Joseph Corr, has resigned and it is restructuring its top management. The airline, which was privatized on Oct. 24, created a new ″office of the chairman″ comprised of Icahn and two other top officials.

Icahn’s statement fueled speculation on Wall Street that he is seeking to sell part or all of TWA, the Wall Street Journal said today.

Icahn, who holds 90 percent of the shares of TWA, told the Journal that the airline isn’t for sale. ″I’ve been saying that for three years. I can’t make it any plainer,″ he said.

The Journal and the Post also noted rumors in financial circles that more than half a dozen other potential bidders for Eastern may be on the horizon.

Corr, the departing TWA president, was mentioned as an interested party, as well as Morton Ehrlich, who recently resigned as TWA’s executive vice president.

The Post quoted union sources as saying a group of St. Louis investors also are trying to make a bid for Eastern.

Texas Air Chairman Frank Lorenzo told the Journal that Eastern is not for sale. When he agreed to sell the shuttle to Trump, however, Lorenzo indicated that the rest of Eastern might be sold if the price were right.

″There are all kinds of coconuts out there that can be dressed up as a buyer (for Eastern),″ Lorenzo said.

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