TALKING POINT/PIEDMONT &lt;PIE>
  Carl Icahn's bold takeover bid for
  USAir Group &lt;U> has clouded the fate of Piedmont Aviation Inc,
  which was being courted by USAir.
      Yesterday, Icahn's Transworld Airlines Inc &lt;TWA> made a 1.4
  billion dlr offer for USAir Group. The move complicated a USAir
  takeover offer for Piedmont, which was believed to be close to
  accepting the bid.
      Today, USAir rejected Icahn's 52 dlr per share offer and
  said the bid was a last-minute effort to interfere in its
  takeover of Piedmont. Icahn was unavailable for comment.
      Piedmont fell one to 68-5/8 on volume of 963,000. TWA was
  off 3/8 to 31-1/2. USAir fell 1-3/8 to 47-3/4 as doubt spread
  it would be taken over.
      Analysts and market sources view the TWA bid as an attempt
  to either trigger a counter offer from USAir or to attract a
  suitor who might want both airlines once they merged.
     "The next move is either Icahn starts a tender offer or
  Piedmont and USAir announce a deal," speculated one arbitrager.
      Some arbitragers said there is now some risk in the current
  price of Piedmont since it is not clear that USAir's bid will
  succeed.
      Piedmont's largest shareholder and other suitor, Norfolk
  Southern Corp &lt;NSC> has offered 65 dlrs per share for the
  company. USAir offered 71 dlrs cash per share for half of
  Piedmont stock, and 73 dlrs per share in stock for the balance.
      Some arbitragers, however, believe the depressed price of
  Piedmont offers a buying opportunity since the airline is
  destined to be acquired by someone. USAir, they said, is the
  least likely to be bought.
      Icahn, who has long talked about further consolidation in
  the airline industry, also offered USAir the alternative of a
  three-way airline combination, including TWA and Piedmont.
      But Wall Street has given little credibility to Icahn's
  offer, which lacked financing and was riddled with
  contingencies.
      Still, he has succeeded in holding up a merger of two
  airlines - both of which analysts said would fit well with TWA.
      "You can't discount him," said one arbitrager.
      Analysts, however, said Icahn would have to prove he is
  serious by following through with his threats or making a new
  offer. In making the offer for USAir, Icahn threatened to go
  directly to shareholders for 51 pct of the stock at a lower
  price if USAir rejected his offer.
      "It's clear Icahn wants to sell and he's bluffing," said
  one arbitrager.
      Analysts said the 52 dlr per share offer was underpriced by
  about six dlrs per share.
      Some analysts believe Icahn's proposed three-way airline
  combination might face insurmountable regulatory hurdles, but
  others believe it could be cleared if the companies are
  acquired separately.
      "TWA would have to be the surviving company for the deal to
  work," said one analyst.
      Analysts said such a merger would be costly and
  complicated. TWA has the best cost structure, since Icahn
  succeeded in winning concessions from its unions.
      In order for the other carriers to come down to TWA's wage
  scale in a merger, TWA would have to be the surviving entity,
  analysts said.
      Such a move does not necessarily free Icahn of TWA, they
  said. They said he showed skill in reducing Ozark Airlines'
  costs when he merged it into TWA last year, and he might be a
  necessary ingredient for a merger to work.
      However, other analysts speculated the managements of
  Piedmont and USAir would not tolerate Icahn as head of a new
  company. They said a USAir acquisition of TWA might be a way
  for him to exit the company if USAir's airline is then merged
  into TWA.
  

