FORT WORTH, Texas — Gerald Arpey, AMR Corp.'s new chief executive officer, has ripped the "For Sale" sign off the company's investment management unit.
William F. Quinn, president of AMR Investment Services Inc., said the business is officially "off the market" and will not be sold.
Mr. Arpey's beleaguered predecessor, Donald J. Carty, decided to put AMR Investments on the block about a year ago because AMR's main unit, American Airlines Inc., was hemorrhaging cash and considering bankruptcy following the Sept. 11, 2001, terrorist attacks. AMR hired Salomon Smith Barney Inc., New York, to assess the investment unit's value in the market and to help find a buyer. Mr. Carty had said that as part of his turnaround plan, company executives needed to examine all non-airline assets in hopes of raising cash through some sales.
But Mr. Arpey — appointed following Mr. Carty's forced resignation in April — believes the opposite.
According to Mr. Quinn, the new CEO says AMR Investments is an "important part" of AMR Corp.'s turnaround efforts. Mr. Arpey is "very fond of the business," Mr. Quinn said.
"AMR Corp. is doing much better now, and they like this business (AMR Investments) — they see it as a valuable asset. It is profitable and will play a key role in the turnaround in the road to recovery at AMR," Mr. Quinn said.
Mr. Quinn said negotiations proceeded with several interested buyers until AMR pulled the unit off the market earlier this month.
Insiders claim AMR Investments was on the verge of being sold to an investment group being put together by Yucaipa Cos., a Los Angeles-based private equity firm that counts former U.S. President Bill Clinton as a senior adviser. Ronald Burkle, a politically active California Democrat, is Yucaipa's general partner. Had the deal been completed, they said, it would have made AMR one of the largest minority-owned investment firms in the country.
Frank Quintero, a spokesman for Yucaipa, said company officials signed a confidentiality agreement and "can't talk about the deal." Mr. Quinn wouldn't comment, either.
The Yucaipa deal was one of several close calls for AMR Investments, according to sources. Another name mentioned early on as a possible suitor was TA Associates, a Boston-based private equity firm.
But industry insiders weren't surprised that an agreement wasn't reached, saying the economic environment has not been healthy for such acquisitions.