AirTran, Midwest Merger DEAD!

[lowecur]

NuGuy & Propsync

You both gave me very good reasons why NWA is in this deal. The only thing left to find out is whether there will be hearings, and who has more political clout to carry the day. GL seems to think NWA has a fairy god mother in Oberstar, so maybe he will carry the day for them.

It wouldn't surprise me, as this country is all about who has the most money to buy votes for instant gratification in lieu of doing what's best for the country in the long run. Our political ethics system is bankrupt and it's bankrupting the country. The future debt to clean up our infrastructure, health insurance system, education, and the war all have been pushed onto our children's shoulders to satisfy the insatiable appetite and greed of this packman type juggernaut they call the corporate american machine.

The large carriers have all benefited from their political lobbying around the country. I read where AMR spent $2.3M last year on lobbying. Bankruptcy has had little effect on changing the good ol boy system, as the only people that took it up the arz were the employees and stockholders. This is not a business where you pay for stupid decisions, it's a business where you live on public wellfare from cycle to cycle.

I'm voting for Dennis Kucinich in the next election. The next Jimmy Carter!

imp: ​

 

[fam62c]

they don't have to sell anything. they can simply recapitalize MEH on the market and sell shares. look how much CAL made on the expressjet IPO.

If TPG does an IPO with MEH they are selling it, they're selling it to the public. A sale is when you trade your equity in a company for cash whether that's a private transaction or an IPO. But I do understand what you are saying, give it a wash and wax job and make it look spiffy then sell it back to the public. If NWA wasn't involved I would assume that would be the plan but the NWA angle throws me off. They are going private here to prevent the company from getting into "enemy" hands.

 

[Lear70]

That's what they did with PCL in the IPO.

Put lots of language in their agreements before they sold to keep them from competing in a meaningful way, then out they went, and in came the cash.

With NWA it doesn't throw me off, it seems like an almost certainty since I lived it once.

 

[CitationLover]

If TPG does an IPO with MEH they are selling it, they're selling it to the public. A sale is when you trade your equity in a company for cash whether that's a private transaction or an IPO. But I do understand what you are saying, give it a wash and wax job and make it look spiffy then sell it back to the public. If NWA wasn't involved I would assume that would be the plan but the NWA angle throws me off. They are going private here to prevent the company from getting into "enemy" hands.

yes i was giving the wash and wax analogy. they are going private now to keep it away from airtran no doubt, but in the future who knows. this is one way TPG can recoup their buyout money. selling pieces makes no sense whatsoever. the only valuable airline assets MEH has is the DCA and LGA slots. the a/c are old or an unused type. MKE real estate isn't too prime. so a piecemeal sale makes no sense to me in the future.

something tells me tim has some friends at TPG and this has been in the works for some time. most ceo's are in the old boys network and i am sure there is some back scratching going on. we have been hearing a lot of "don't believe what you read in the papers" for some time now.

 

[ultrarunner]

I'd have to agree with Citation. There was an incredible amount of fuss and a MASSIVE amount of money wasted in defending and initiating an attempted takeover. For what, an tiny regional carrier with 35 planes or so and a growth plan led by the lowest-bidder contract carrier?

I don't think so.

TPG will stay in it for a bit..if the deal closes. And MEH will have to make a serious showing, or it'll be sold off or IPO'd off. One or the other.

We shall see.

 

[Gate 69]

Time for AirTran to take of the gloves. Open a hub in STL or IND if they want more midwest exposure.

 

[Eagle757shark]

Time for AirTran to take of the gloves. Open a hub in STL or IND if they want more midwest exposure.

That would seem the logical thing to do. However in this competitive market, it is very difficult to go into a city and create a hub. JL knows that and has talked about that several times in past interviews. History has shown in this industry that to grow a network you generally have to merge. NO airline with a national network has done so without a few mergers. That includes Southwest which has two in its past. It is only a matter of time, but AirTran will be forced to merge with another carrier. Will they find a merger partner, I believe the wheels may be already turning. When the COO released yesterday that AirTran was not looking to merge, probable is code for they are. (AirTran will probable be very quiet about any future mergers until it is done considering they have been beat twice in past deals) When America West attempted to buy ATA back in 2004 and Southwest got the gates, the first thing America West said was they were not interested in a merger partner. Well six months later, US Airways and America West merged. With competition as fierce as it is and with the amount of capital needed, starting a hub is not in the best interest of AirTran. A merger will soon come!

 

[Fly4hire]

Time for AirTran to take of the gloves. Open a hub in STL or IND if they want more midwest exposure.

Sure AMR will bow down to the mighty LLC in STL, as will NWA in Indy...

I suppose AAI will try, as evidenced already, the tried and true tactic of when they get their butt kicked in the cut throat world of airline competition, to claim unfair competitive practices, anti-trust, etc.

As to the DOJ protecting AAI good luck. Let's see, MEH has gone private, keeping the franchise intact, the same management, and expanding out of MKE. Ya sure, the NW code share is anti-competitive.

If DOJ was to shoot this down, what precedent would it set for future mergers of larger legacies?

 

[deadstick]

Taxes

So here's a question:

How are taxes figured for the shareholder in a deal like this?

In the cash/stock scenario, is only the cash gain ($9.50-$x) factored in now, and the stock side would be declared when the AAI stock is sold?

In the TPG deal, the gain between $16 and the original purchase price is the factor, right (ie $16-$x)?

The stock holders are going to pay taxes one way or another, unless, of course, they are Al Capone, Wesley Snipes, or Daryl Strawberry.


*******************8
Reuters

Midwest Air investor concerned about TPG offer
Tuesday August 14, 7:50 am ET

NEW YORK (Reuters) - Pequot Capital Management Inc., a large shareholder in Midwest Air Group Inc. (AMEX:MEH - News), said on Tuesday it has "significant concerns" about the airline's decision to pursue a takeover bid by TPG Capital and Northwest Airlines Corp. (NYSE:NWA - News).

"We are not convinced that this taxable, all-cash indication of interest is superior" to the cash-and-stock offer from AirTran Holdings Inc. (NYSE:AAI - News), Pequot Capital, which owns 8.8 percent of Midwest, said in a filing with the U.S. Securities and Exchange Commission.

(Reporting by Chris Reiter)

 

[Taildragon]

Is Midwest the only airline started in the 80's that is still around?