CitationLover
Aw, Nuts!
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they're in the seatbacks.
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Midwest is sold to TPG
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they're in the seatbacks.
Northwest could eventually own Midwest AirPosteddocument.write(niceDate('8/20/2007 7:00 AM')); 1d 9h ago | Comment | Recommend E-mail | Save | Print | 
MILWAUKEE — Northwest Airlines could end up owning rival Midwest Air Group, which has agreed to a $450 million buyout offer from private equity firm TPG Capital.
Northwest is a passive investor in the deal and may eventually buy Midwest outright, TPG partner Richard Schifter said in a conference call Friday morning.
The equity firm may want to cash out of the deal some day, he said, and Minneapolis-based Northwest could become the sole owner. Schifter said such a move could be several years away.
Betcha it happens sooner rather than later.
swapContent('firstHeader','applyHeader');By Emily Fredrix, AP Business WriterMILWAUKEE — Northwest Airlines could end up owning rival Midwest Air Group, which has agreed to a $450 million buyout offer from private equity firm TPG Capital.
Northwest is a passive investor in the deal and may eventually buy Midwest outright, TPG partner Richard Schifter said in a conference call Friday morning.
The equity firm may want to cash out of the deal some day, he said, and Minneapolis-based Northwest could become the sole owner. Schifter said such a move could be several years away.
Betcha it happens sooner rather than later.
TPG doesn't have to grow MEH at all... This is simple, NWA used TPG as a front to buy MEH. NWA put up some of the money (sounds like about 40% or about $176 million) with every intent to buy it completly out in a couple years. However, using TPG essentially bypasses any anti-trust and makes it seem that NWA isn't really the ones buying MEH. Now, all NWA has to do is give TPG and extra $50 million or so ontop of the $450 million and guess what, TPG makes money, NWA ownes MEH for $500 million, and AAI is out of the picture. $500 million is cheap when you consider the damage AAI could have done to NWA.. I'm not saying this is exactly how its gonna happen, but for you guys who think TPG needs to grow MEH to make money your absolutly wrong. Once NWA ownes MEH outright they could shut the doors on MEH and build MKE on their own.. NWA and CAL was a different story all together, if you wanna make comparisons, compare NWA and Champion.... I don't think there is any way NWA is going to allow MEH to grow and affect thier markets. This is the exact reason they didn't want AAI in MKE... Good luck MEH guys, like I said before, I think your gonna need it...... I think that if I was an MEH employee, I would have much rather had AAI buy MEH than NWA.. At least with AAI you knew what the plan was, and that was for major growth, with NWA, who really knows...
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Lear70
JAFFO
- Joined
- Oct 17, 2003
- Posts
- 7,487
How much you wanna bet?
einstein's
I love all those who stroke your ego's with "You know what is going to happen" blah blah....Put your money where your mouth is if your so brilliant or start your own airline.
It gets old after awhile...to listen to this. Here are some humbling ideas that I am sure you all knew was going to happen. Thats why your all filthy rich!
Deregulation happened in 1978..mail routes no longer dictate.
Eastern went bankrupt?!
Braniff is gone after muliple times.
Pan Am is gone!
SWA is still here after all these years.shut up critics.
Usairways bought piedmont not piedmont bought usairways.
Ohio State Football rules and Michigan sucks!
I love all those who stroke your ego's with "You know what is going to happen" blah blah....Put your money where your mouth is if your so brilliant or start your own airline.
It gets old after awhile...to listen to this. Here are some humbling ideas that I am sure you all knew was going to happen. Thats why your all filthy rich!
Deregulation happened in 1978..mail routes no longer dictate.
Eastern went bankrupt?!
Braniff is gone after muliple times.
Pan Am is gone!
SWA is still here after all these years.shut up critics.
Usairways bought piedmont not piedmont bought usairways.
Ohio State Football rules and Michigan sucks!
Lear70
JAFFO
- Joined
- Oct 17, 2003
- Posts
- 7,487
ATLplt
"Well, do ya, punk?"
- Joined
- Mar 9, 2004
- Posts
- 453
No, no, you've got it all wrong. The SEC rules and the Big Ten sucks. :beer:
Private equity's benefits
By TOM SMITH and KEVIN KENEALEY
Posted: Aug. 20, 2007
TPG Capital, a private equity investment firm, with backing from Northwest Airlines Corp., reached an agreement to acquire Midwest Airlines on Thursday.
It appears Midwest will keep its name and remain in Milwaukee, where it has been a point of civic pride.
Some may question, however, whether Midwest's fate is any more assured in the hands of a private equity firm than it would have been with a publicly traded, low-cost airline like AirTran Airways. Here's a glimpse at some of the benefits of private equity ownership.
Under the public microscope, companies are held to short-term growth goals measured quarter to quarter. After AirTran made its first takeover bid, this pressure for instant gratification only increased for Midwest.
A private equity firm such as TPG, on the other hand, typically looks for its investments to pay off over five to seven years. This longer-term approach allows more flexibility to make strategic decisions and follow through, which is in line with the steady-growth plan Midwest CEO Timothy Hoeksema has touted in recent months in response to the AirTran bid.
During AirTran's quest, CEO Joe Leonard made regular mention of his company's potential to add economic might to Midwest in Milwaukee. But Midwest will potentially gain an even stronger financial partner.
With a private equity firm, the airline will have a ready source of additional equity to pursue opportunities as they occur, and it'll be able to access that money more quickly and reliably than it would have been able to through the public markets.
Midwest also will be free from the burdensome costs of public regulation, which, we can attest, saves money based on our recent public-to-private transformation of Milwaukee's Oilgear Co. Oilgear will save nearly $1 million per year in paperwork, legal and accounting fees and other costs after making the switch. For a company the size of Midwest, those savings will go far beyond $1 million.
"The cookies stay," Hoeksema said Thursday in announcing the TPG deal.
He was highlighting one of the biggest benefits of private equity involvement in Midwest. The airline can remain independent, preserving its significant legacy of high-quality service that's made the airline so special to employees, management and the community.
Private equity involvement often comes in the form of strategic planning and providing additional resources to grow the business. In addition to capital, a private equity firm may have a network of other resources - such as experience and expertise in a given industry - to assist management teams in achieving their objectives.
The Midwest deal also showcases the high degree of flexibility in a private equity transaction. This flexibility is one reason private equity can offer prices comparable to and, in the case of the AirTran bid, higher than those of competitors. As a cash transaction, the TPG bid had the advantage of being a more dependable offer than AirTran's cash-and-stock offer, especially given the recent wild fluctuations in the stock market.
Some are expressing concern about Northwest's involvement in the TPG bid. The decision to partner with another airline, and one that's a major player in the same market, is an unusual deal structure, to say the least. But given all the other benefits this private equity buyout can bring to Midwest, spirits should be hopeful for the airline, its many fans and its hometown.
Tom Smith and Kevin Kenealey are managing directors at Mason Wells, a Milwaukee-based private equity firm.
By TOM SMITH and KEVIN KENEALEY
Posted: Aug. 20, 2007
TPG Capital, a private equity investment firm, with backing from Northwest Airlines Corp., reached an agreement to acquire Midwest Airlines on Thursday.
It appears Midwest will keep its name and remain in Milwaukee, where it has been a point of civic pride.
Some may question, however, whether Midwest's fate is any more assured in the hands of a private equity firm than it would have been with a publicly traded, low-cost airline like AirTran Airways. Here's a glimpse at some of the benefits of private equity ownership.
Under the public microscope, companies are held to short-term growth goals measured quarter to quarter. After AirTran made its first takeover bid, this pressure for instant gratification only increased for Midwest.
A private equity firm such as TPG, on the other hand, typically looks for its investments to pay off over five to seven years. This longer-term approach allows more flexibility to make strategic decisions and follow through, which is in line with the steady-growth plan Midwest CEO Timothy Hoeksema has touted in recent months in response to the AirTran bid.
During AirTran's quest, CEO Joe Leonard made regular mention of his company's potential to add economic might to Midwest in Milwaukee. But Midwest will potentially gain an even stronger financial partner.
With a private equity firm, the airline will have a ready source of additional equity to pursue opportunities as they occur, and it'll be able to access that money more quickly and reliably than it would have been able to through the public markets.
Midwest also will be free from the burdensome costs of public regulation, which, we can attest, saves money based on our recent public-to-private transformation of Milwaukee's Oilgear Co. Oilgear will save nearly $1 million per year in paperwork, legal and accounting fees and other costs after making the switch. For a company the size of Midwest, those savings will go far beyond $1 million.
"The cookies stay," Hoeksema said Thursday in announcing the TPG deal.
He was highlighting one of the biggest benefits of private equity involvement in Midwest. The airline can remain independent, preserving its significant legacy of high-quality service that's made the airline so special to employees, management and the community.
Private equity involvement often comes in the form of strategic planning and providing additional resources to grow the business. In addition to capital, a private equity firm may have a network of other resources - such as experience and expertise in a given industry - to assist management teams in achieving their objectives.
The Midwest deal also showcases the high degree of flexibility in a private equity transaction. This flexibility is one reason private equity can offer prices comparable to and, in the case of the AirTran bid, higher than those of competitors. As a cash transaction, the TPG bid had the advantage of being a more dependable offer than AirTran's cash-and-stock offer, especially given the recent wild fluctuations in the stock market.
Some are expressing concern about Northwest's involvement in the TPG bid. The decision to partner with another airline, and one that's a major player in the same market, is an unusual deal structure, to say the least. But given all the other benefits this private equity buyout can bring to Midwest, spirits should be hopeful for the airline, its many fans and its hometown.
Tom Smith and Kevin Kenealey are managing directors at Mason Wells, a Milwaukee-based private equity firm.
SkiFishFly
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