Icahn Air-Fare Firm to Sell 7.5 Million Shares

Lowestfare.com said it plans to sell 7.5 million shares for $11 to $13 each in an initial public offering, which would add more than $370 million to the fortune of its principal shareholder and chairman, Carl Icahn. The Las Vegas-based company’s IPO presents an avenue for Icahn to benefit from an unusual agreement he forged in 1995 with Trans World Airlines Inc., where he was once chairman. Under that agreement, Icahn extended the repayment date on loans he made to TWA in exchange for the right to buy TWA tickets at a sharp discount and then resell them. That arrangement now is supplying most of the tickets that Lowestfare.com sells to the public at low prices. While the company says it has arrangements with others, such as America West Airlines and Northwest Airlines, 97.4% of Lowestfare.com’s total revenue for 1998 stemmed from the TWA arrangement, the company said. Icahn owns 28.6 million shares of Lowestfare.com and will own about 79% of its stock after the IPO, the company said in its filing with the Securities and Exchange Commission. Lowestfare.com filed to go public in March but did not disclose the number of shares it hoped to sell or a price.