By Soyoung Kim and Kyle Peterson

(Reuters) – AMR Corp, the bankrupt parent of American Airlines, is the prize in a likely bidding war by rival carriers, but any merger involving the third largest U.S. airline is expected to come on its own terms and timing.

US Airways Group (LCC.N: Quote, Profile, Research, Stock Buzz), Delta Airlines (DAL.N: Quote, Profile, Research, Stock Buzz) and private equity firm TPG Capital TPG.UL are all exploring a potential deal, according to people familiar with the matter.

British Airways, meanwhile, is keen to protect its partnership with AMR in the international oneworld airline alliance and would be open to making a minority investment if needed to solidify that relationship, separate sources said.

Unwelcome bidding has little chance of success under bankruptcy law that grants AMR exclusive rights to submit a reorganization plan for up to 18 months. That makes it difficult for anyone to attempt a merger without AMR’s blessing.

Instead, with no shortage of courtship from would-be suitors, American Airlines can probably afford to choose a partner of its own liking if it concludes it needs one at the end of the restructuring process, the sources said.

“Everyone’s positioning themselves for when American Airlines does emerge from bankruptcy and everyone’s covering their options. But just because you’re building the battleship, doesn’t mean you’re going to succeed,” said one of the sources.

Jan 24 (Reuters) – AMR Corp, the bankrupt parent of American Airlines, is the prize in a likely bidding war by rival carriers, but any merger involving the third largest U.S. airline is expected to come on its own terms and timing.

US Airways Group (LCC.N: Quote, Profile, Research), Delta Airlines (DAL.N: Quote, Profile, Research) and private equity firm TPG Capital TPG.UL are all exploring a potential deal, according to people familiar with the matter.

British Airways, meanwhile, is keen to protect its partnership with AMR in the international oneworld airline alliance and would be open to making a minority investment if needed to solidify that relationship, separate sources said.

Unwelcome bidding has little chance of success under bankruptcy law that grants AMR exclusive rights to submit a reorganization plan for up to 18 months. That makes it difficult for anyone to attempt a merger without AMR’s blessing.

Instead, with no shortage of courtship from would-be suitors, American Airlines can probably afford to choose a partner of its own liking if it concludes it needs one at the end of the restructuring process, the sources said.

“Everyone’s positioning themselves for when American Airlines does emerge from bankruptcy and everyone’s covering their options. But just because you’re building the battleship, doesn’t mean you’re going to succeed,” said one of the sources.

AMR Chief Executive Tom Horton, who has long insisted the company is focused on thriving as a stand-alone carrier, said last month that “opportunists” could attempt a merger with AMR as it restructures.

NEW YORK (Reuters) – Activist hedge fund MMI Investments LP, which had taken positions in several technology and defense companies and successfully pushed for deals in some cases, is winding down, people familiar with the matter said.

New York-based MMI, run by partners Clay Lifflander and Jerome Lande, has been liquidating its portfolio and has stepped away from all investments over the past several weeks, the sources said.

In 2010, MMI urged long-time takeover target Applied Signal Technology to solicit buyout offers, resulting in a $490 million sale to Raytheon Co (RTN.N: Quote, Profile, Research, Stock Buzz). MMI was also behind the $506 million sale of satellite company EMS Technologies to Honeywell International Inc (HON.N: Quote, Profile, Research, Stock Buzz) last year.

It was not immediately clear why the fund is liquidating, but one of the sources said it was a personal decision among people in the partnership group and was an amicable breakup.

Representatives for the fund were not immediately available for comment.

In one of its most recently disclosed investments, MMI took a 3.3 percent stake in communications equipment maker Comtech Telecommunications Corp (CMTL.O: Quote, Profile, Research, Stock Buzz) last fall and sought a sale of the company and board representation. In November, the fund abruptly withdrew its nominations of two director candidates for Comtech’s board.

The activist fund had a mixed track record in its investments last year — which typically involved taking a minority stake in companies and urging them to consider a sale.

By Nick Zieminski and Soyoung Kim

(Reuters) – Carl Icahn has won an ally in his proxy battle with truck and defense vehicle maker Oshkosh Corp (OSK.N: Quote, Profile, Research, Stock Buzz) management after a leading corporate governance advisory firm said it would support three of Icahn’s nominees to the Oshkosh board.

Institutional Shareholder Services (ISS) cited the nominees’ larger strategic vision for the company in deciding to support Icahn’s nominees, Icahn Enterprises LP said on Wednesday.

Last week, independent proxy advisory firms Glass Lewis & Co and Egan-Jones Proxy Services recommended that their clients vote for all of the Oshkosh director nominees at Oshkosh`s 2011 annual meeting of shareholders on January 27.

Oshkosh said in a statement on Wednesday that it believes ISS’ report endorsing Icahn’s nominees is “fundamentally flawed”, and that it is convinced Icahn’s slate of nominees, if elected, would simply carry out the investor’s “self-serving agenda.”

Oshkosh is locked in a proxy battle with Icahn ahead of the January 27 shareholder meeting, and the two sides have been filing a series of proxy materials for shareholders in recent weeks.

Among other proposals, Icahn has called on Oshkosh to explore alternatives for its JLG aerial lift business and to allow the company to participate in defense industry consolidation as both a buyer and a seller.

NEW YORK (Reuters) – Relational Investors confirmed on Wednesday that it had reviewed aerospace and defense conglomerate Textron Inc (TXT.N: Quote, Profile, Research, Stock Buzz) in the past as a possible investment opportunity but it was never a serious prospect, a spokesman for the activist investor told Reuters.

The statement comes after a source familiar with the situation told Reuters on Tuesday that the Los Angeles hedge fund run by investor Ralph Whitworth had looked at Textron about a month ago. That source was not aware whether the investor had bought a stake in the company.

Relational said that while it normally doesn’t comment on its investment prospects, it had not bought a stake in Textron, which is the world’s biggest maker of corporate aircraft and also makes Bell helicopters.

Sources familiar with the matter told Reuters on Tuesday that Textron was conducting a strategic review that could include options such as spinning off parts of the conglomerate.

Several activist investors have looked at Textron as a prime target to advocate for a change in strategy, as each of the firm’s major business lines has run into headwinds at different points in time.

It was not clear if Textron’s strategic review resulted from the interest of an activist investor or was part of a regular business review. The sources said on Tuesday that they did not expect the evaluation to yield changes in Textron’s strategy in the near term.

Textron has been struggling to turn around its Cessna division as the global economy remains weak, while its defense businesses face pressure from shrinking U.S. military budgets.

NEW YORK/WASHINGTON (Reuters) – Textron Inc (TXT.N: Quote, Profile, Research, Stock Buzz), the maker of Cessna aircraft and Bell helicopters, is conducting a strategic review that could include options such as spinning off parts of the aerospace and defense conglomerate, sources familiar with the situation said.

About a month ago, activist investor Ralph Whitworth’s Relational Investors had examined Textron as a potential target to advocate for a change in strategy, one of the sources said. That source was unaware whether Relational had bought a stake in the company.

It was also not immediately clear if Textron’s strategic review resulted from the interest of an activist investor or was part of a regular business review. The sources did not expect the evaluation to yield changes in Textron’s strategy in the near term.

The company, which has a market value of about $5.6 billion, has not held a process to formally hire any bankers, though it has a long-standing relationship with Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz), the sources said.

Representatives for Textron said they do not comment on market speculation. Goldman Sachs declined to comment. Relational Investors did not immediately return calls for comment.

The past four years have been volatile for Textron, which has cut its staff by about a quarter and seen its shares lose more than 70 percent of their value. Textron shares, which traded as high as $74.40 in 2008, closed at $20.17 on Tuesday.

Chief Executive Scott Donnelly has fought to turn around the company, as each one of its major business lines have run into headwinds at different points in time.

NEW YORK (Reuters) – Australia’s Brambles Ltd (BXB.AX: Quote, Profile, Research, Stock Buzz), the world’s top pallet supplier, received first offers from private equity groups for its U.S. document management business valued at more than $2 billion, three people familiar with the matter said.

Carlyle Group and Apollo Global Management (APO.N: Quote, Profile, Research, Stock Buzz) are among four buyout firms short-listed for the Brambles unit, Recall, the people said. They have been given access to a data room and final bids are expected in mid-February, they added.

Brambles values the Recall business at around $2.2 billion, more than 9 times its earnings before interest, tax, depreciation and amortization (EBITDA) of some $240 million, one of the sources said.

The two other sources said some of the bidders valued Recall at over $2 billion.

Brambles, Carlyle and Apollo declined to comment.

Brambles said in November the Recall sale was predicated on international debt markets being sufficiently stable to enable bidders to secure finance.

Two of the sources said on Tuesday that debt continued to be available for the deal, allowing bidders to leverage the unit at about six times in their offers.

NEW YORK, Jan 10 (Reuters) – Australia’s Brambles Ltd (BXB.AX: Quote, Profile, Research), the world’s top pallet supplier, received first offers from private equity groups for its U.S. document management business valued at more than $2 billion, three people familiar with the matter said.

Carlyle Group and Apollo Global Management (APO.N: Quote, Profile, Research) are among four buyout firms short-listed for the Brambles unit, Recall, the people said. They have been given access to a data room and final bids are expected in mid-February, they added.

Brambles values the Recall business at around $2.2 billion, more than 9 times its earnings before interest, tax, depreciation and amortization (EBITDA) of some $240 million, one of the sources said.

The two other sources said some of the bidders valued Recall at over $2 billion.

Brambles, Carlyle and Apollo declined to comment.

Brambles said in November the Recall sale was predicated on international debt markets being sufficiently stable to enable bidders to secure finance.

Two of the sources said on Tuesday that debt continued to be available for the deal, allowing bidders to leverage the unit at about six times in their offers.

NEW YORK (Reuters) – Caterpillar Inc (CAT.N: Quote, Profile, Research, Stock Buzz) said on Tuesday it remained in talks with interested parties over a potential sale of its third-party logistics business but several factors including the global economic environment have caused delays in reaching a deal.

Caterpillar said the company would not have a decision on the strategic review of its logistics business before the end of the year. It is hopeful that a decision can be reached in the first quarter of 2012 given the current market and business trends, Caterpillar said in a statement to Reuters.

In March, Caterpillar said it would examine a range of options for its third-party logistics business including a potential sale, and hired Bank of America Merrill Lynch and Robert W. Baird & Co to advise on the process.

Private equity firms TPG Capital, Centerbridge Partners and BC Partners were the final suitors left in the running for the logistics business, which could fetch more than $1 billion, people familiar with the matter have said.

Two sources said Caterpillar’s final negotiations focused on TPG Capital as the buyer, but cautioned that there was no certainty that a deal would be reached. TPG and Centerbridge declined to comment while BC Partners did not respond to a request for comment.

The third-party logistics unit — part of Caterpillar’s wholly owned subsidiary, Caterpillar Logistics Services Inc — was formed 24 years ago in response to requests from other companies that wanted to use Caterpillar to ship parts all over the world.

(Additional reporting by John Stoll, editing by Matthew Lewis and Carol Bishopric)

NEW YORK, Dec 12 (Reuters) – Rockwell Collins Inc (COL.N: Quote, Profile, Research, Stock Buzz) is not for sale right now, but the company would be fiscally responsible if a potential buyer were willing to pay a high price for the supplier of flight controls and other electronics for airplanes, its chief executive said on Monday.

“The last thing on my list of strategic alternatives to grow the company and provide value is to sell the company. And as a result, the company is not for sale right now,” Clay Jones said at the 2011 Reuters Manufacturing and Transportation Summit in New York.

Still, he added: “Any CEO of a public company has to do the responsible fiduciary thing if for some reason someone wanted to pay a very high price for our company … so we would not be irresponsible in that regard.”

Jones said United Technologies Corp’s (UTX.N: Quote, Profile, Research, Stock Buzz) planned purchase of fellow plane-parts supplier Goodrich Corp (GR.N: Quote, Profile, Research, Stock Buzz) for $127.50 a share, or $16.5 billion, suggests that his company could have a richer valuation.

That deal is “the proof point that I think our company is currently undervalued,” Jones said.

Rockwell Collins, based in Cedar Rapids, Iowa, sells electronic systems for commercial and military aircraft. The defense side of the business is starting to slow after eight years of strong growth as the U.S. Defense Department cuts budgets and looks to rein in program costs.

COMMERCIAL SIDE GAINING STRENGTH