AirTran, Midwest Merger DEAD!

[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?

 

[Propsync]

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

Kind of. I think they are considered the longest lasting new carrier since deregulation. Although, I couldn't name another carrier still around that was started in the 80's. Either way. Coming up on 25 years. Born out of Kimberly-Clark's (paper products) corporate department. IPO sometime in the late 90's.

 

[Donsa320]

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

Technically Southwest and Midwest are the only survivors after the deregulation event. Yes, Southwest is older but was only intrastate (Texas). Many have come and gone or merged. JetAmerica, Muse, Morris, People's, New York Air, Texas Int'l, Air Florida, PSA (intrastate CA), Republic (Southern, North Central, Hughes Airwest), and many more.

 

[CitationLover]

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)

well you are being hit with a capital gain tax right away with the $16 TPG deal. with airtran you were getting hit with a prorated (9/15.75) capital gain and then will have a future capital gain once the airtran stock was sold.

with a democrat potentially coming into the white house next year capital gain rates most likely will go up in the future so i fail to see their "concerns". what does pequot want? tim could have said, "f you" by state law i am protected and they would have got nothing except diluted shares.

 

[~~~^~~~]

The saga of Midwest Air's (MEH : Midwest Express Holdings, Inc.


"In addition, we fail to see how TPG and Northwest will be able to match the job creation and growth opportunities promised by Airtran," the letter read.

And that is why I do not understand this deal other than NorthWest's effort to control a competitor and possibly strip mine some assets.

 

[~~~^~~~]

TPG is now caught having to show their cards and I'm guessing that they had no intention of wanting to play this particular hand.

That does make sense.

 

[Yuppyguppy]

Where you guys gonna put all your planes?

 

[Ualexpress]

Where you guys gonna put all your planes?

I dunno. Where you gonna put all yours. Whoops, sorry you don't have any more planes coming. Unless you count RJs.

 

[SkiFishFly]

Where you guys gonna put all your planes?

I think you will see quite a few in MKE, possibly MSP and DTW as well.

 

[ultrarunner]

I think you will see quite a few in MKE, possibly MSP and DTW as well.

Have you got the gates?

 

[DCitrus9]

Yes. Not enough for huge expansion, but enough to add a few cherry picked routes.