Report: United Continental Is Close To Reaching An Agreement With Activist Investors

Bloomberg reported late Monday afternoon that United Continental Holdings Inc UAL is close to finalizing an agreement with activist investors who are pushing the airline to make changes to its Board of Directors. As part of a potential agreement, United Continental may replace its Chairman Henry Meyer III with an individual that has "deep airline experience" - a demand imposed by Altimeter Capital Management and PAR Capital Management. The activist investor firms jointly control 7.2 percent of the company. Potential contenders to replace Meyer include Robert Milton, an ex-CEO of Air Canada and James Whitehurst, an ex Chief Operating Officer at Delta Air Lines, Inc. DAL Meanwhile, the activist investors are likely to gain representation on United Continental's Board of Directors, but not the original 6 seats they demanded, Bloomberg noted. In fact, 2 or 3 of the proposed candidate slates are under consideration for a director post. However, ex-Continental CEO Gordon Bethune is no longer in the running. The activist investment firms said that it never wanted to take over the Board of Directors, rather to gain representation and the company would be in a stronger position if it were to name Bethune, Milton or Whitehurst as chairman. The funds also said they support the company's CEO Oscal Munoz. Shares of United Continental were trading higher by more than 1.50 percent Tuesday morning at $57.90.