Updated from 7:34 a.m. EDT
Investors are playing the airline takeover game again, this time with
Trans World Airlines
Shares in TWA closed up 5/16, or 12%, to 2 7/8 following a
Wall Street Journal
report Friday that it was in talks to either merge or be bought out by
- the Orlando, Fla-based cheap-fare airline formerly known as Valujet.
Talks began a month ago, sources told the
, and former due dilligence began recently. The talks center around either a full merger or an AirTran buyout of St. Louis-based TWA, but both airlines, at least initially, would be operated independently.
In reaction to the report, Julia Bishop-Cross, spokeswoman for TWA, said, "There are lots of rumors flying around. TWA is aware of what is happening in the industry. All airlines participate in talks with other airlines about various business transactions from time to time."
The report cautioned that a deal is not imminent and would face numerous hurdles. The article pointed out that any TWA-AirTran hook-up would not be in response to the merger frenzy that has gripped the airline industry lately, but a response to the shaky financial ground on which each of the two airlines stand.
In recent weeks,
, the parent of United Airlines, announced it planned to
AMR's American Airlines
AirTran finished up 1/4, or 6%, to 4 9/16