Investor Group Agrees to Purchase of Braniff

DALLAS — A group led by the investment bank PaineWebber Group Inc. said Saturday it agreed to acquire Braniff Inc. in a leveraged buyout that valued the money-losing airline at $111 million.

The investor group, BIA Acquisitions, also appointed five top executives who resigned from Piedmont Airlines on Friday to manage Braniff.

“We intend for Braniff to become a strong competitive force in our nation’s air travel and hospitality industries,” Jeffrey R. Chodorow, a BIA official, said in a statement.

BIA did not elaborate on its plans for Braniff and officials in the investor group could not be reached for comment. But in recent weeks, the group has pledged to expand the Dallas-based airline and protect the jobs of its employees.

Braniff--once the country’s eighth-largest carrier before it declared bankruptcy in 1982 and laid off thousands of workers--employs 1,300 people in Dallas and 2,600 total.

BIA agreed to buy Braniff from Dalfort Aviation Inc., which is owned by the Pritzker family of Chicago. BIA is paying $7 a share in cash and a pro rata share of 20% of the restructured airline for each share of Braniff common stock.

Caps Two Weeks of Talks

The agreement capped two weeks of negotiations between Dalfort and BIA. Dalfort turned down a previous offer from the investor group about four months ago.

William G. McGee will take over as chairman, chief executive and president of Braniff. McGee was chairman and chief executive of Piedmont and helped build that airline into the nation’s ninth-largest carrier, and one of the most profitable airlines, before it was acquired by USAir last year.

Braniff primarily serves the Southwest, but analysts have speculated that it may try to reduce its operations at Dallas-Ft. Worth, where there is strong competition between Ft. Worth-based American Airlines and Atlanta-based Delta Air Lines, and expand operations at its second hub at Kansas City International Airport, where competition is less severe.

PaineWebber will control a majority of the airline, the BIA statement said.

Dalfort owned 64% of the airline’s common stock and all of its Series A preferred stock, which gave it more than 90% of the stock voting rights.