AMR Corporation - part of an article
Early Edge: AMR Corp., Sears Holdings, Rite Aid, and Lennar Corp.
The airline issue is raising its offer to invest in a struggling Japanese peer
by Elizabeth Harrow (eharrow@sir-inc.com) 1/7/2010 9:40 AM
The American Airlines unit of AMR Corporation (AMR: View sentiment for AMRsentiment, chart, options) has hiked its offer to invest in troubled Japan Airlines (JAL) by $300 million to $1.4 billion, according to a report in The Wall Street Journal. The newspaper's sources say that American held a meeting with JAL's top brass this morning to propose the sweetened bid.
AMR price chart Currently, AMR is battling with domestic rival Delta Air Lines (DAL) to snap up a minority stake in JAL. "We are still in negotiations with both airlines," said a JAL spokeswoman in response to the Journal's report.
The bidding war could easily intensify, since Delta President Ed Bastian indicated today that his company is also willing to raise the stakes. "We are willing and able to raise additional capital through third-party resources," asserted Bastian at a press conference.
AMR is fractionally higher in early trading as investors digest these developments. The stock has recently enjoyed a short-term rally, boosted by support at its 10-day and 20-day moving averages.
Thanks to the airline issue's show of technical strength, calls have become a popular choice. AMR's 10-day International Securities Exchange (ISE) call/put volume ratio stands at 8.97, as bullish bets have been nearly nine times more popular than their bearish counterparts during the past two weeks.
