   Donald Trump, who faced rising doubt about his bid for American
Airlines parent AMR Corp. even before a United Airlines buy-out came apart
Friday, withdrew his $7.54 billion offer.
   Separately, bankers representing the group trying to buy United
's parent UAL Corp. met with other banks about reviving that purchase at
a lower price, possibly around $250 a share, or $ 5.65 billion.
    But a lower bid could face rejection by the UAL board.
   Mr. Trump, who vowed Wednesday to "go forward" with the bid, said he was dropping it `` in light of the recent change in market conditions."
   He said he might now sell his AMR stake, buy more shares, or make
another offer at a lower price.
 The Manhattan real-estate developer acted after the UAL buyers failed
to obtain financing for their earlier $300-a-share bid, which sparked
a selling panic among analysts that snowballed into a 190-point drop Friday in the Dow Jones Industrial Average.  News about UAL and AMR, whose shares never reopened after trading was halted Friday for the UAL announcement, sent both stocks nosediving in composite trading on the New York Stock Exchange.  UAL tumbled $56.875 to $ 222.875 on volume of 2.3 million shares, and AMR declined by $22.125 to $ 76.50 as 4.7 million shares changed hands.
   Together, the two stocks wreaked havoc among takeover stock traders, and caused a 7.3 % drop in the Dow Jones Transportation Average, second
in size only to the stock-market crash of Oct. 19, 1987.
  Some said Friday's market debacle had given Mr. Trump an excuse
to bail out of an offer that showed signs of stalling even before problems
emerged with the UAL deal.
  After reaching an intraday high of $107.50 the day Mr. Trump disclosed
his bid Oct. 17, AMR's stock had retreated as low as $97.75 last week.
  Some takeover stock traders had been betting against Mr. Trump
because he has a record of disclosing stakes in companies that are potential
takeover targets, then selling at a profit without making a bid.
  "He still hasn't proven his mettle as a big-league take-out
artist," said airline analyst Kevin Murphy of Morgan Stanley &amp; Co.
  "He's done this thing where he 'll buy a little bit of a company
and then trade out of it.
  He's written this book, ` The Art of the Deal. '
  Why doesn't he just follow through on one of these things ?"
  Mr. Trump withdrew his bid before the AMR board, which is due
to meet tomorrow, ever formally considered it.
  AMR had weighed a wide range of possible responses, from flat
rejection to recapitalizations and leveraged buy-outs that might have included
either employees, a friendlier buyer such as Texas billionaire Robert
Bass, or both.
  AMR had also sought to foil Mr. Trump in Congress by lobbying for
legislation that would have bolstered the authority of the Transportation
Department to reject airline buy-outs.
  Yesterday, Mr. Trump tried to put the blame for the collapse of
the UAL deal on Congress, saying it was rushing through a bill to protect
AMR executives.
  "I believe that the perception that legislation in this area
may be hastily approved contributed to the collapse of the UAL transaction, and the resulting disruption in the financial markets experienced this
past Friday," Mr. Trump wrote members of Congress.
  AMR declined to comment, and Mr. Trump didn't respond to requests
for interviews.
  Mr. Trump never said how much AMR stock he had bought, only that
his holdings were "substantial."
  However, he only received federal clearance to buy more than $
15 million of the stock on Sept. 20, when the price rose $3.00 a share to
$78.50.
  Between then and his bid on Oct. 17, the price fluctuated between
$75.625 and $ 87.375.
  In an attempt to persuade investors that his bid wasn't just
"a stock play," Mr. Trump promised last week to notify the market before
selling any shares.
  AMR was trading at around $84 yesterday before his withdrawal
announcement, then immediately fell to about $76.
  Assuming that he paid a rough average price of $80 a share, and
assuming he didn't sell before his announcement reached the market, Mr.
Trump could be sitting with a modest loss with the stock at $76.50.
  Some analysts said AMR Chairman Robert Crandall might seize the
opportunity presented by the stock price drop to protect the nation's
largest airline with a defensive transaction, such as the sale of stock
to a friendly holder or company employees.
   However, other knowledgeable observers said they believed Mr.
Crandall and the AMR board might well decide to tough it out without taking
any extra steps.
   Some analysts said they believed Mr. Trump, whose towering ego
had been viewed by some as a reason to believe he wouldn't back out,
might come back with a lower bid.
   Ray Neidl of Dillon Read &amp; Co. said Mr. Trump "is stepping
back and waiting for the dust to settle.
   I 'm sure he still wants AMR."
   But others remained skeptical.
   "I was never sure Donald Trump really wanted to take AMR,"
said John Mattis, a bond analyst with Shearson Lehman Hutton Inc.
   "What happened with United was a gracious way for him to bow
out."
   Mr. Trump never obtained financing for his bid.
   That skepticism would leave him with an even greater credibility
problem should he return that would handicap him in any effort to oust
the board in a proxy fight.
   Meanwhile, Citicorp and Chase Manhattan Corp., the two lead lenders
on the UAL buy-out, met with other banks yesterday to determine if they
would be willing to finance the buy-out at a lower price.
  Officials familiar with the talks said Citicorp had discussed lowering
the offer to $250 a share, but said that price was a talking point and
that no decision has been made.
  At $250 a share, the group would have to borrow about $ 6.1 billion
from banks.
  The first UAL deal unraveled after Citibank and Chase couldn't
raise $7.2 billion.
  Citibank and Chase had agreed to commit $billion, and said
they were "highly confident" of raising another $4.2 billion.
  Together, Citicorp and Chase received $million in fees to raise
the rest of the financing.
  But other banks balked at the low interest rate and banking fees
the UAL group was willing to pay them.
  Officials familiar with the bank talks said the UAL buy-out group
-- UAL pilots, management, and British Airways PLC -- is now willing
to pay higher bank fees and interest, but isn't likely to boost its $
965 million equity contribution.
  Nor is the group likely to come forward with a revised offer within
the next 48 hours despite the hopes of many traders.
  The group's advisers want to make certain they have firm bank
commitments the second time around.
  Even if the buy-out group is able to obtain financing, the transaction
still faces obstacles.
  UAL's board could reject the new price as too low, especially
since there aren't any competing bids.
  Los Angeles investor Marvin Davis, whose $275-a-share offer was
rejected by UAL's board, hasn't shown signs of pursuing a $300-a-share
back-up bid he made last month.
  In addition, the coalition of labor and management, longtime
enemies who joined forces only under the threat of Mr. Davis's bid, could
break apart now.
  The group's resilience gets its first test today when 30 top pilot
union leaders convene outside Chicago in a previously scheduled meeting.
  Union Chairman F.C. (Rick) Dubinsky faces the tough task of
explaining why banks refused to finance a buy-out the members approved
overwhelmingly last week.
  The pilot union is vowing to pursue an acquisition whatever the
board decides.
  But if the board rejects a reduced bid and decides to explore other
alternatives, it could transform what has been a harmonious process into
an adversarial one.
  The pilots could play hardball by noting they are crucial to any
sale or restructuring because they can refuse to fly the airplanes.
  If they were to insist on a low bid of, say $200 a share, the
board mightn't be able to obtain a higher offer from other bidders because
banks might hesitate to finance a transaction the pilots oppose.
  Also, because UAL Chairman Stephen Wolf and other UAL executives
have joined the pilots' bid, the board might be forced to exclude him
from its deliberations in order to be fair to other bidders.
   That could cost him the chance to influence the outcome and perhaps
join the winning bidder.
