Delta, United said to near Avianca bids amid Elliott talks

Avianca Holdings is studying options including the sale of a controlling stake and is set to receive bids next week from suitors including Delta and United Continental, people familiar with the matter said. The offers, due by Nov. 9, may include about $500m in new capital for Bogota-based Avianca, plus a purchase of common stock from current shareholders, said the people, who asked not to be named because the talks are private. Copa Holdings also is expected to present a bid. Avianca has been seeking a partner to help shore up its balance sheet and support growth. The carrier is controlled by brothers German and Jose Efromovich, who have used the majority of their shares as collateral to borrow funds from Elliott Management Corp. Elliott, controlled by billionaire Paul Singer, is active in the airline’s search for partners and has met with the potential suitors, the people said. The Colombian carrier declined to comment, as did Delta, United and Copa. Elliott didn’t reply to requests for comment. Avianca would consider offers for a controlling stake, the people said. Alternatively, control of the airline may end up being divided among the new bidder, the Efromovich brothers, and Kingsland Holdings, a partner in the current control group. The company’s indebtedness is one of the key risks, and its focus on curbing debt and slowing capacity expansion is “welcome,” said Renato Mimica, an analyst at BTG Pactual.<br/>