Takeover battle to test Delta CEO

ATLANTA — The last time Gerald Grinstein was running an airline and pulled it from a financial mess, he said he wanted it to remain independent.

A few months later, Grinstein, then the chief executive of Los Angeles-based Western Airlines, announced an $860 million deal to merge the revived carrier with Delta Air Lines.

That was 20 years ago.

Now, Grinstein is running Delta. And again he says he wants it to remain a stand-alone carrier.

But just as Delta's Chapter 11 recovery effort appears to be gaining strength, Grinstein's resolve for independence is again being tested. US Airways' unsolicited $8.5 billion takeover bid for Atlanta-based Delta, announced Nov. 15, dumped a sudden storm in Grinstein's flight path.

To push back the bid, Grinstein needs to convince the airline's key creditors that their stake will be more valuable if it's in an independent Delta than in one being merged with US Airways.

Grinstein has not given any interviews or made public appearances since the takeover dogfight erupted. Bill Morey, who represents reservations workers before Delta's board and senior management, said he spoke with Grinstein a few hours after the US Airways announcement.

Grinstein seemed frustrated, not worried, Morey recalled. "He did say that this is something that we don't need to be dealing with right now, we are trying to get our house in order."

To fight off US Airways, Grinstein will be pushed to work every angle he's learned in his long career as a top congressional aide, lawyer, investor and chief executive.

US Airways presented its offer to representatives of Delta and its creditors last week in New York. Delta will effectively make its counteroffer to the creditors when it files an independent reorganization plan, which it hopes to present before the holidays.

Grinstein was apparently blindsided by US Airways' tactics. The 74-year-old twice rebuffed his 45-year-old counterpart at US Airways, Doug Parker, when that airline, based in Tempe, Ariz., approached Delta privately earlier in the year.

Parker's interest didn't fade, though. US Airways executives code-named the takeover attempt "Green," the color that results from combining Delta, dubbed "Blue," with US Airways, labeled "Yellow."