US Airways Group ups offer for Delta by $1.7 billion

US Airways Group Inc. (NYSE:LCC) has upped its offer for Delta Airlines Inc. by $1.7 billion to $10.2 million, making a merger between the two airlines inevitable.

As the Associated Press puts it: :"US Airways was raising its bid to remove any doubt that its bid was worth more than Delta's plan to remain a standalone carrier." US Airways, whose bid expires Feb. 1 unless due diligence starts, al wants Delta to postpone a Feb. 7 hearing regarding its bankruptcy organization plan, the AP says.

The dance between the two airlines is following a predictable path. The acquiring CEO makes an unsolicited offer that he says is his absolutely final price. The offer is then rejected and the CEO suddenly decides his final price isn't so final after all. It wouldn't surprise me if US Airways raised its offer at least once more.

Delta's creditors are considering both US Airways' offer and Delta's plan to remain a standalone company. Even though it's not an easy call, I would bet that the creditors will back US Airways. The merger seems to provide them with a better chance of getting their money than waiting for Delta to emerge from Chapter 11 bankruptcy.

--Jonathan Berr is the editor of http://www.desperateinvestors.com.