MINNEAPOLIS Four advisory firms are recommending that shareholders approve Delta Air Lines Inc.'s proposed purchase of Northwest Airlines Corp.
Shareholders from both companies are meeting separately on Sept. 25 to vote on the deal, which would create the world's largest airline. The carriers also need antitrust approval, which they have said they hope to get by the end of this year.
Glass, Lewis & Co., RiskMetrics Group, Proxy Governance, and Egan-Jones Proxy Services all recommended votes in favor.
However, Glass Lewis recommended in its report on Friday that shareholders withhold votes for eight Northwest directors, including chairman Roy Bostock, Northwest CEO Doug Steenland, and historian Doris Kearns Goodwin. It recommended against seven of them because they were on the board when it approved a poison pill without a shareholder vote. Poison pills are generally aimed at making a buyout of the company harder, but Northwest's board has waived it for the Delta transaction. Delta does not have a poison pill.
It also recommended against director David A. Brandon because he is also Chairman and CEO of Domino's Pizza Inc. and is a director at four other companies. Glass Lewis worried that Brandon could be stretched too thin by spending as much as 800 hours per year on other boards besides his commitment to Domino's.
RiskMetrics, the most influential shareholder advisory firm, also said in its Sept. 11 report that it generally advises against poison pills but said it wasn't objecting in this case because of the pending buyout. If the transaction doesn't go through, RiskMetrics said it would "revisit this issue at the company's next annual meeting."