AirTran, Midwest Merger DEAD!

[SkiFishFly]

That's what BODs and CEOs do best--take care of themselves! I certainly wish it weren't that way. Nobody knows this game better then the current NWA executive suite. They are doing quite well for themselves.

Ain't that the truth...

 

[deadstick]

one other thing regarding airbus.....

who is selling some airbus? NWA is dumping some of theirs (however i thought someone else had already bought them). so the reported virgin meeting and NWA makes sense, sort of.

But I thought is was the short 'Buses that were getting parked. They were getting the same DOC with less capacity. I thought MidEx wanted the 320's.

 

[Eagle757shark]

Aint you glad you didn't let the NPA talk you into voting for that first TA! At the road shows they were trying to push this TA through for the sake of the Midwest merger. I kept saying no, these are two seperate issues. First, the concern of the BOD and NC should be with getting the best possible contract for the AirTran pilots! Could you imagine how we'd look now had we listened to our BOD and voted for that TA originally put out. They used fear that we'd lose something in this merger if we didn't vote yes, and now the deal is dead. Alan, and whoever becomes the NPA president, focus on the pilots that elected you and work hard to make this a strong unified union! Don't get bogged down in management deals that may or may not go through. Folks let this be a lesson in Negotiations 101......NPA, HEAR THIS! I was starting to believe that with all the mistakes the NPA was making, we'd be the first union in history to be stapled to the bottom of our own list after our airline bought another carrier. (HUMOR)
Seriously folks it is important to stay focused on getting the best work rules and compensation for the pilots of AirTran Airways! PERIOD!

 

[CitationLover]

Aint you glad you didn't let the NPA talk you into voting for that first TA! At the road shows they were trying to push this TA through for the sake of the Midwest merger. I kept saying no, these are two seperate issues. First, the concern of the BOD and NC should be with getting the best possible contract for the AirTran pilots! Could you imagine how we'd look now had we listened to our BOD and voted for that TA originally put out. They used fear that we'd lose something in this merger if we didn't vote yes, and now the deal is dead. Alan, and whoever becomes the NPA president, focus on the pilots that elected you and work hard to make this a strong unified union! Don't get bogged down in management deals that may or may not go through. Folks let this be a lesson in Negotiations 101......NPA, HEAR THIS! I was starting to believe that with all the mistakes the NPA was making, we'd be the first union in history to be stapled to the bottom of our own list after our airline bought another carrier. (HUMOR)
Seriously folks it is important to stay focused on getting the best work rules and compensation for the pilots of AirTran Airways! PERIOD!

amen, good luck to the AAI pilots, you deserve better than the TA on the table.

 

[NuGuy]

Heyas,

"The enemy of my enemy is my friend"

I think that's what happened here.

MEH management didn't want to go, and some investors that wanted to keep MEH in "local" hands conjured up this deal.

No doubt about it, NWA takes win, place and show in the "Last minute smash and grab to piss off your competition". First CAL, now this.

If the stockholders get as much or more, no lawsuit, and cash is King.

Nu

 

[Schwanker]

TPG in the action--Surprise, Surprise

Midwest Air Group Board of Directors Unanimously Determines to Pursue $16 Per Share All-Cash Offer From TPG Capital
Sunday August 12, 11:02 pm ET
MILWAUKEE, Aug. 12 /PRNewswire-FirstCall/ -- The Board of Directors of Midwest Air Group (Amex: MEH - News), parent company of Midwest Airlines, today said that it has unanimously determined to pursue an all-cash offer from TPG Capital, L.P. on behalf of an affiliate of TPG and one or more partners to acquire all of the outstanding shares of Midwest for $16.00 per share.The board took its action after receiving a letter from AirTran Holdings, Inc. (NYSE: AAI - News) in which AirTran stated it was making its best and final offer to acquire all of the outstanding shares of Midwest pursuant to a one-step merger for consideration consisting of cash and stock at $15.75 per share, valued at Friday's closing price of AirTran's common stock. In reaching that determination, the board concluded that the TPG offer presented greater value and certainty for Midwest shareholders than the AirTran offer.
Under the terms of the offer from TPG, the private equity investor indicated that its acquisition "would permit the Company to continue its rich legacy as a leading provider of customer oriented quality air service."
Midwest and TPG expect to execute a definitive merger agreement no later than August 15, 2007.
The offer from TPG is set forth in the following letter that was received by the Midwest board on August 12:
Board of Directors
Midwest Air Group, Inc.
6744 South Howell Avenue
Oak Creek, Wisconsin 53154

Ladies and Gentlemen:

TPG Capital, L.P. ("TPG") is pleased to submit the following indication
of interest for an acquisition by TPG of Midwest Air Group, Inc., a
Wisconsin corporation (the "Company"), for $16.00 in cash for each share
of the Company's common stock.

We believe that our proposal offers a compelling opportunity for your
shareholders and is superior to the proposal that has been submitted by
AirTran Holdings, Inc. ("AirTran"). The proposed purchase price is an all
cash offer, which, in light of the recent volatility in the United States
equity markets, represents a more certain value for your shareholders
than the large stock component of AirTran's proposal. In addition to
providing more certain value, an acquisition by TPG would permit the
Company to continue its rich legacy as a leading provider of customer
oriented quality air service. Our acquisition would provide for greater
stability and prospects for all of the Company's important constituencies
including customers, employees and the greater Milwaukee and Kansas City
metropolitan areas. We have been very impressed with your management team
and are confident in its ability to maintain the Company's reputation of
excellent service, while at the same time running a profitable airline.

We believe that our experience in this sector, together with our track
record for maintaining stable, long term investments, argue strongly in
favor of an acquisition by TPG. We are one of the largest private equity
investors in the world and the most experienced private equity investor
in the global airline sector. Investments carried out by us in and
related to the airline industry include, among others, Continental
Airlines, America West Airlines, Ryanair, Hotwire and Sabre. We are proud
of the record that we and the management teams have accomplished in
creating value in these companies.

Our transaction would be financed through contributions from TPG Partners
V, L.P., a fund we manage with $15.3 billion of committed equity capital,
and one or more partners, which contributions would be fully committed at
the time of signing. The consummation of the transaction would not be
subject to a financing condition, and we do not anticipate any issues in
obtaining antitrust clearance or any other regulatory approvals, so we
anticipate consummation would be subject only to customary conditions.

We are fully prepared to complete confirmatory legal and accounting due
diligence and the concurrent negotiation of definitive documents on an
expedited basis in order to execute a transaction by August 15, 2007.

This letter is an expression of interest only and any binding agreement
would arise only upon execution of definitive agreements.

We are very excited about the prospects for this transaction, and we look
forward to having the opportunity to work with you to finalize a
transaction that we believe will benefit your shareholders and other
constituencies. We are prepared to meet with you or your representatives
at any time to discuss all aspects of our proposal.

Very truly yours,

TPG Capital, L.P.
By:
Name: Richard P. Schifter
Title: Partner

 

[FlyWolf]

one other thing regarding airbus.....

who is selling some airbus? NWA is dumping some of theirs (however i thought someone else had already bought them). so the reported virgin meeting and NWA makes sense, sort of.

Citation, I heard from the CP office that most properly they will be leasing used Airbuses or 737 to get the ball rolling on the md80 replacement, and that until we can get our own aircrafts.

 

[CitationLover]

Citation, I heard from the CP office that most properly they will be leasing used Airbuses or 737 to get the ball rolling on the md80 replacement, and that until we can get our own aircrafts.

yes i mispoke. by "selling" i meant leasing out which is what virgin was trying to accomplish. a "used" airbus from virgin is a good gig, only 100 hours on it.

it would be nice to see some people come in below me if we have growth and have a lot of the senior FO's move to the left seat.

looks like the training department will be busy......

 

[Schwanker]

Northwest Airlines Joins TPG Bid for Midwest Air Group
Sunday August 12, 11:30 pm ET
EAGAN, Minn.--(BUSINESS WIRE)--Northwest Airlines (NYSE:NWA - News) today confirmed it is a passive investor in the acquisition entity that TPG Capital, L.P. (TPG) has created to pursue an acquisition of all of the outstanding shares of Midwest Air Group, Inc. at $16 per share. The bid submitted by TPG is subject to the satisfaction of certain conditions.
Milwaukee-based Midwest Air Group operates Midwest Airlines and Midwest Connect. The TPG offer was presented to the Midwest Air Group board of directors on August 12, 2007.
NWA, which is providing financing to facilitate the transaction, will not participate in the management or control of Midwest should TPG acquire Midwest. The previously announced codeshare agreement between NWA and Midwest Airlines will remain in place and the two airlines will explore cost reduction activities such as joint fuel purchasing.
Northwest has briefed its union leadership on the transaction. The investment contemplated is consistent with all of NWA's union obligations.
Northwest Airlines is one of the world's largest airlines with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1,000 cities in excess of 160 countries on six continents.

 

[Captainjerky]

What happens to MKE?

A lot of the scare tactics used by Baghdad Carol in this Midwest/AirTran saga centered on them claiming service would suffer and the Wisconsin traveler would lose out. I believed AirTran wanted to noticeably expand operations in MKE and in the end generate many more, and yet cheaper, travel options.
That said, what are the feelings on how Northwest would change MKE? Since they're presumably doing this to deny AirTran/ buy a troublesome competitor (Midwest), how do you all think this affects MKE and Wisconsin travelers? Northwest has 2 hubs (MSP and DET) within what, 300 miles of there? They're not doing this to build up another hub. I'd be worried that they in fact strip down MKE and only keep enough real estate to appear to be fending off AirTran. Maybe AAI execs figure MKE will get slashed and burned and there'll be gate space available soon there anyway!
I have no opinion or stake in Northwest, so I'm not trying to start a "they suck/they rule" thread, but I'm concerned that this is bad in the long run for the passengers, and creates career worries for Midwest pilots and employees.

 

[Ty Webb]

This is no buyout offer.

TPG Capital, L.P. ("TPG") is pleased to submit the following indication
of interest for an acquisition by TPG of Midwest Air Group, Inc., a
Wisconsin corporation (the "Company"), for $16.00 in cash for each share
of the Company's common stock.

Puh-lease. That is about as solid as a PHL taxiway on a 95-degree day . . . . I can't believe that our management can play so well at the table against our weak-dick union, and then be played for fools by SWA, NWA, and even little bitty MEH.

On the plus side, I think that most of the AAI FO's will be happy at this news . . . . those that haven't already firmed up their own "exit plan".

I think this also signals the beginning of the countdown for the end of MEH. I give it two years, three at best.

.

 

[Fly-By-Cable]

Well I bet JL feels like a fool now. After he bullied Boeing and Airbus in 2003 into giving him the "best price" for 100 aircraft order, he thought the same will apply to Midwest. The way these guys negotiate is: "We'll give you 100 bucks and you give us your airline. That's our first offer, let's start working from here".
That was their first mistake - being cheap and hopping for the best, the second is gonna be their pilot group walking out on a strike and shutting down this airline for a couple of days causing unrepairable damage to the company.
The final one will be SW takeover and dismantling of AirTran. An airline career that should have ended with a burning DC10 at the end of the runway at ORD, will end with thousands of lost jobs at AAI.

 

[Ty Webb]

An airline career that should have ended with a burning DC10 at the end of the runway at ORD, will end with thousands of lost jobs at AAI.

Now, now . . . don't despair. All is not lost. Management still has the opportunity to channel Ty Webb down to MCO to straighten this crap out. In short- Spirit merger- yes. Frontier- yes. Eastern name- yes. Tabor- gone. Carol - gone. Laura, Skipper and Allen - gone. (you knew the Co had the controls, right?) New pricing, based on web-based auction software. Bid for your seat, pay more for a reservation, less at time of departure, a real, live, market-baed approach to selling tickets. Welcome to the millenium . . . . only 7 years too late.

New future, new beginning, new CEO . . . . Ty Webb.

Thank ya, Thank ya very much . . . . . .


.

 

[Fly-By-Cable]

New future, new beginning, new CEO . . . . Ty Webb.

Now that would make a nice bag sticker!

 

[Eagle757shark]

AirTran really needed this deal more than Midwest. I think that is what is lost in this whole ordeal.(no matter how people will try to spin it today) When AirTran lost out on the ATA deal, Midwest was there back up. AirTran is limited on gate space in Atlanta. So the question still remains, what happens next? Does the company attempt a merger with another low-cost carrier or become a possible takeover option for a legacy? AirTran has a good presence in Atlanta and a strong presence on the east coast and Florida. Could these things bring a possible buyer to Orlando? Are Frontier or even Alaska possible partners? I will say it shall be one hell of an ending to 2007. (Couldn't write a better cliffhanger)

 

[Ty Webb]

Are Frontier or even Alaska possible partners? I will say it shall be one hell of an ending to 2007. (Couldn't write a better cliffhanger)

Joe L. told my recurrent class last year that we did approach Alaska (as had been rumored). He said they basically " . . . didn't know who we were, and weren't interested in talking with us".

I guess that means the merger is imminent . . . !

Seriously, I think that Frontier is waiting in the wings, and possibly Spirit and/or Allegiant, but who knows. People talk a lot about fleets, but leases were meant to be broken . . . . . it's like trading in a car . . . . . honest Habib will take that lease off your hands if you only step up and buy an all-new Itchipussi 900 with sunroof and moonboots.

/

 

[GOULET!]

Couldn't have said it any better Fly-By-Cable. JL is a tool who shouldn't be anywhere near the head of an airline. Wouldn't want to be around him tomorrow morning. Very glad that this deal with AirTran fell through. Going to be very interesting to see what role NWA actually has in this and what comes of it. Doesn't take a genius to figure out that NW was at least 1 of the interested parties. Classic example of defending their home court. I do agree with CaptainJerky that MKE could be in serious trouble with MSP and DTW so close.

 

[deadstick]

A lot of the scare tactics used by Baghdad Carol in this Midwest/AirTran saga centered on them claiming service would suffer and the Wisconsin traveler would lose out. I believed AirTran wanted to noticeably expand operations in MKE and in the end generate many more, and yet cheaper, travel options.
That said, what are the feelings on how Northwest would change MKE? Since they're presumably doing this to deny AirTran/ buy a troublesome competitor (Midwest), how do you all think this affects MKE and Wisconsin travelers? Northwest has 2 hubs (MSP and DET) within what, 300 miles of there? They're not doing this to build up another hub. I'd be worried that they in fact strip down MKE and only keep enough real estate to appear to be fending off AirTran. Maybe AAI execs figure MKE will get slashed and burned and there'll be gate space available soon there anyway!
I have no opinion or stake in Northwest, so I'm not trying to start a "they suck/they rule" thread, but I'm concerned that this is bad in the long run for the passengers, and creates career worries for Midwest pilots and employees.

Yea, me thinks growth for Midwest/Skyway just came to a screeching halt. Maybe just enough to keep the AirTran growth at MKE at bay, but that is it.

On the surface, it was a good deal that even JL's 3 board members apparnetly supported. All cash. It's souinds likethe quick cash-out solution and not a long-term one.

What do people think about the anti-trust issue?

One more thing. I like JL's spin "AirTran said earlier on Sunday it was walking away from its hostile bid to acquire Midwest in light of the rival takeover offer. " Ummm...it was voted down 9-0, right.

 

[GOULET!]

Officially I believe AirTran "walked away" before the deal with the equity firm went through so the 3 AirTran board members would have been stupid to not vote for it. From a shareholder's standpoint this deal is far better than AirTran's because it is all cash. I don't necessarily agree that growth at Midwest/Skyway will stop however what remains to be seen is exactly how big of a role NWA has invested with the equity firm.

Leave it up to Joe Leonard for the positive spin. Just like he was saying last week that it was a 90% done deal. Would bet he has some pretty pissed off employee's to talk to tomorrow.

 

[deadstick]

Officially I believe AirTran "walked away" before the deal with the equity firm went through so the 3 AirTran board members would have been stupid to not vote for it. From a shareholder's standpoint this deal is far better than AirTran's because it is all cash. I don't necessarily agree that growth at Midwest/Skyway will stop however what remains to be seen is exactly how big of a role NWA has invested with the equity firm.

Leave it up to Joe Leonard for the positive spin. Just like he was saying last week that it was a 90% done deal. Would bet he has some pretty pissed off employee's to talk to tomorrow.

This was in the new update:

"Discount carrier AirTran, Orlando, Fla., had raised its cash-and-stock bid to $15.75 a share, or about $431 million, from $15 in the competition for Midwest. But it said Sunday night that it threw in the towel after the Midwest board rejected its offer."