HOUSTON (AP) — Continental and United have agreed to disclose more information about their negotiations in order to settle three lawsuits by Continental shareholders who protested that they were shortchanged by the $3 billion deal to create the world's biggest airline.
The airlines said in regulatory filings Tuesday that the unhappy Continental shareholders agreed to drop their lawsuits in exchange for the airlines providing more details, such as how negotiators arrived at the plan to give Continental shareholders 1.05 United shares for each Continental share held.
The airlines said they also will disclose the procedures their financial advisers used to perform their financial analyses and certain investment banking fees they paid to those advisers over the past two years.
The combined company will be called United Airlines and will be based in United's hometown of Chicago. It will be run by Continental CEO Jeff Smisek and an executive team from both airlines.
The plaintiffs sought class-action status for their lawsuits, which were filed in state court in Houston shortly after the deal was announced in early May. They charged that Continental shareholders were getting shortchanged in the deal with United and that the Houston company's directors failed to uphold their fiduciary duty to shareholders by approving it.
The settlement was reached Sunday, according to Tuesday's filings with the Securities and Exchange Commission. Both companies denied any wrongdoing. The settlement didn't change terms of the deal.
The airlines still face an antitrust lawsuit filed in June in California. A group of travelers said the two airlines are competitors on many routes and a merger will lead to higher ticket prices and worse service. Continental and United say they plan to vigorously defend against the charges.
The U.S. Justice Department is still weighing antitrust implications of the combination.
Shares of the two airlines have tracked each other closely since the merger was announced. In trading Tuesday, Continental shares fell $1.09, or 4.3 percent, to close at $24.50, and UAL shares dropped 97 cents, or 4 percent, to finish at $23.20.
|< Prev||Next >|