Report: United near deal to overhaul board
United Continental Holdings Inc. is close to an agreement to overhaul its board to appease activist investors, a deal that would include replacing Chairman Henry Meyer III, Bloomberg reports, citing unnamed sources.
In March, Altimeter Capital Management and PAR Capital Management made a public pitch to add six of their own nominees to the board. The two investment firms own a combined 7 percent stake in United Continental, the parent of United Airlines.
Brad Gerstner, CEO of Altimeter Capital, said in a statement that investors are “greatly disappointed with United’s poor performance and bad decisions over the last several years.” The most prominent of the investors’ nominees is Gordon Bethune, who served as CEO of Continental Airlines from 1994 through 2004. Bethune is largely seen as turning that troubled airline into one of the country’s leading carriers.
United merged with Continental in 2010 and has struggled ever since. Unions fought the integration, customer service declined, flights were delayed and computer problems persisted.
The battle over the board erupted as United CEO Os- car Munoz returned from medical leave. Munoz became CEO in October after United dismissed Jeff Smisek amid a federal investigation into the airline’s dealings with the government agency running one of its most important airports.
Munoz quickly brought some fresh air to the company, taking responsibility for the troubled integration and promising to make immediate changes to make employees and passengers happier. However, he suffered a heart attack on Oct. 15 and had a heart transplant In January.