Continental shares rise on United bid possibility

Investors would "react favorably" to a United and Continental pairing, Stifel Nicolaus analyst Hunter Keay said. He upgraded Continental to a "buy" from a "hold."

Continental and United, a unit of UAL Corp (UAUA.O), are both part of the Star Alliance and discussed merging in 2008 before Continental ended talks.

Last week, news emerged that US Airways and United are in talks to create the No. 2 airline in the U.S., which could leave Continental in a tough spot, analysts have said.

"We expect CAL to respond with a bid for UAUA in the near term, partly as a defensive maneuver to protect its immunized JV, but also because of synergy benefits from creating the world's largest airline," Keay wrote in a note on Monday.

Read Full Article from Reuters

- Posted: 2010-04-12 10:37:35

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