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Midwest/TPG/NWA Threeway...
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grog_sit_reserv
Crashcave Lounger
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MIDWEST AIR GROUP BOARD EXECUTES
DEFINITIVE MERGER AGREEMENT WITH TPG CAPITAL
Agreement Provides for $17 per Share in Cash for Midwest's Shareholders
Milwaukee, Wisconsin, August 16, 2007 – Midwest Air Group (AMEX: MEH), parent company of Midwest Airlines, today announced that it has signed a definitive merger agreement to be acquired by an affiliate of TPG Capital, L.P. in a transaction valued at approximately $450 million. The merger agreement was unanimously approved by the Midwest Air Group Board of Directors.
Under the terms of the agreement, each outstanding share of Midwest's common stock will be converted into the right to receive $17.00 per share in cash. On December 12, 2006, the last trading day before the public announcement of AirTran's indication of interest in acquiring Midwest, the per share price of Midwest's common stock was $9.08. Midwest has approximately 26.6 million shares outstanding, including shares subject to options, restricted share awards and outstanding warrants.
"This is a significant milestone for Midwest," said Timothy E. Hoeksema, chairman and chief executive officer. "The agreement preserves the airline's status as Milwaukee's hometown airline and the popular Midwest Airlines brand for Midwest's loyal customers and employees. TPG shares our commitment to quality and truly understands the value of a differentiated product. We're looking forward to a long-term relationship with TPG, and benefiting from their strength and experience."
Richard P. Schifter, partner, TPG Capital, added, "TPG is excited about the opportunity to invest in Midwest Airlines, which has managed to preserve a quality of service to its passengers rarely seen today. We look forward to working with management and its highly motivated workforce in driving growth and creating more value. We hope that our industry experience, together with an expanded alliance with Northwest Airlines, will lead to a bigger and better Midwest."
The transaction is expected to be completed in the fourth quarter of 2007. All financing for the transaction is in the form of equity and has been committed. No debt financing is required. The transaction is subject to approval by Midwest's shareholders, as well as other customary conditions, including anti-trust approvals.
The agreement with TPG came at the conclusion of a process in which TPG and AirTran were each asked to submit a "best and final" offer by noon Central time on August 16, 2007. At that time, TPG submitted its $17.00 per share proposal.
The TPG proposal was weighed against a proposal from AirTran of $16.27 per share in cash and AirTran stock. More specifically,
AirTran proposed to pay $10.00 in cash plus a fraction of a share of its stock having a value of $6.27 based upon an average market price during a specified period leading up to closing ("valuation period"), so long as (i) AirTran's stock averaged between $9.32 and $11.39 during such period and (ii) AirTran was able to obtain at least $150 million of debt financing at an interest cost not exceeding 13.5% per annum. AirTran's debt commitment letters were subject to a "market out" condition.
If AirTran's debt financing had not been available on such terms, AirTran would have had the option of reducing the cash component to as low as approximately $4.35 per share and issuing a fraction of a share of its stock having a value of $11.92 based upon an average market price during the valuation period, so long as AirTran's stock averaged between $9.32 and $11.39 during such period. In such instances, depending upon the number of AirTran shares to be issued, the transaction would have been conditioned upon approval by AirTran's shareholders.
If the average stock price during the valuation period were outside the $9.32 and $11.39 collars, the amount of AirTran shares issued no longer floated but became fixed. The per share value at closing of the total consideration could then have been less or more than $16.27 per share.
The Midwest board carefully considered the differences in value, closing conditions and other terms between the TPG and AirTran proposals and unanimously approved the TPG proposal.
Samuel K. Skinner, chairman of the board's special review committee established in connection with the board's exploration of strategic and financial alternatives and former Secretary of the U.S. Department of Transportation, noted that "the board's process was carefully designed to maximize value and the committee received best and final offers from both bidders."
Northwest Airlines Corporation will be a minority passive investor in Midwest Air Partners, LLC, the entity formed to acquire Midwest.
Goldman, Sachs & Co. is acting as financial advisor and Godfrey & Kahn, S.C. and Sidley Austin LLP are acting as legal advisors to Midwest Air Group in connection with the transaction.
Citigroup Global Markets Inc. is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to TPG in connection with the transaction.
DEFINITIVE MERGER AGREEMENT WITH TPG CAPITAL
Agreement Provides for $17 per Share in Cash for Midwest's Shareholders
Milwaukee, Wisconsin, August 16, 2007 – Midwest Air Group (AMEX: MEH), parent company of Midwest Airlines, today announced that it has signed a definitive merger agreement to be acquired by an affiliate of TPG Capital, L.P. in a transaction valued at approximately $450 million. The merger agreement was unanimously approved by the Midwest Air Group Board of Directors.
Under the terms of the agreement, each outstanding share of Midwest's common stock will be converted into the right to receive $17.00 per share in cash. On December 12, 2006, the last trading day before the public announcement of AirTran's indication of interest in acquiring Midwest, the per share price of Midwest's common stock was $9.08. Midwest has approximately 26.6 million shares outstanding, including shares subject to options, restricted share awards and outstanding warrants.
"This is a significant milestone for Midwest," said Timothy E. Hoeksema, chairman and chief executive officer. "The agreement preserves the airline's status as Milwaukee's hometown airline and the popular Midwest Airlines brand for Midwest's loyal customers and employees. TPG shares our commitment to quality and truly understands the value of a differentiated product. We're looking forward to a long-term relationship with TPG, and benefiting from their strength and experience."
Richard P. Schifter, partner, TPG Capital, added, "TPG is excited about the opportunity to invest in Midwest Airlines, which has managed to preserve a quality of service to its passengers rarely seen today. We look forward to working with management and its highly motivated workforce in driving growth and creating more value. We hope that our industry experience, together with an expanded alliance with Northwest Airlines, will lead to a bigger and better Midwest."
The transaction is expected to be completed in the fourth quarter of 2007. All financing for the transaction is in the form of equity and has been committed. No debt financing is required. The transaction is subject to approval by Midwest's shareholders, as well as other customary conditions, including anti-trust approvals.
The agreement with TPG came at the conclusion of a process in which TPG and AirTran were each asked to submit a "best and final" offer by noon Central time on August 16, 2007. At that time, TPG submitted its $17.00 per share proposal.
The TPG proposal was weighed against a proposal from AirTran of $16.27 per share in cash and AirTran stock. More specifically,
AirTran proposed to pay $10.00 in cash plus a fraction of a share of its stock having a value of $6.27 based upon an average market price during a specified period leading up to closing ("valuation period"), so long as (i) AirTran's stock averaged between $9.32 and $11.39 during such period and (ii) AirTran was able to obtain at least $150 million of debt financing at an interest cost not exceeding 13.5% per annum. AirTran's debt commitment letters were subject to a "market out" condition.
If AirTran's debt financing had not been available on such terms, AirTran would have had the option of reducing the cash component to as low as approximately $4.35 per share and issuing a fraction of a share of its stock having a value of $11.92 based upon an average market price during the valuation period, so long as AirTran's stock averaged between $9.32 and $11.39 during such period. In such instances, depending upon the number of AirTran shares to be issued, the transaction would have been conditioned upon approval by AirTran's shareholders.
If the average stock price during the valuation period were outside the $9.32 and $11.39 collars, the amount of AirTran shares issued no longer floated but became fixed. The per share value at closing of the total consideration could then have been less or more than $16.27 per share.
The Midwest board carefully considered the differences in value, closing conditions and other terms between the TPG and AirTran proposals and unanimously approved the TPG proposal.
Samuel K. Skinner, chairman of the board's special review committee established in connection with the board's exploration of strategic and financial alternatives and former Secretary of the U.S. Department of Transportation, noted that "the board's process was carefully designed to maximize value and the committee received best and final offers from both bidders."
Northwest Airlines Corporation will be a minority passive investor in Midwest Air Partners, LLC, the entity formed to acquire Midwest.
Goldman, Sachs & Co. is acting as financial advisor and Godfrey & Kahn, S.C. and Sidley Austin LLP are acting as legal advisors to Midwest Air Group in connection with the transaction.
Citigroup Global Markets Inc. is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to TPG in connection with the transaction.
That's the best news I've heard in a while. Thank goodness this thing is over. Good luck MEH employees. I'm afraid you all are in for a roller coaster ride - I hope not.
Now we can get back to doing what needs to be done. Taking care of our pilots' contract and concentrating on our own expansion model, one that has been Extremely successful over the last 8 years.
Now we can get back to doing what needs to be done. Taking care of our pilots' contract and concentrating on our own expansion model, one that has been Extremely successful over the last 8 years.
Good luck to you guys with your contract. Hope it turn out well for all.
russtgol
........
- Joined
- May 25, 2007
- Posts
- 391
It sure does suck when Valuejet does'nt have the cash to seal the deal.... Poor Valuejet.... Maybe when your out of business in a couple of years you can get a job with some other SCAB Airline..... Hey I hear Midwest is looking for some 737's... Maybe they can buy some of the ones you will be deferring!!!!!!
HAHAHAHAHAHAHAAH!!!!!!!!!!!!!!!!!!!!
HAHAHAHAHAHAHAAH!!!!!!!!!!!!!!!!!!!!
Capt. Over
Haulin' it on 18 wheels.
- Joined
- Nov 30, 2001
- Posts
- 136
can't hardly wait....
...to see what comes of all this business in 4 or 5 years when TPG has had enough and NWA has had us under their thumb keeping us just the way we are now with the exception of a few more RJ's, which we all know are a virus to mainline.
I, for one, was looking forward to growth. And maybe, just maybe TPG will give us some but I have to believe that their is a NWA rat is this deal somewhere that will have the final laugh when all is said and done in a few years.
For the record, I love working here and the people I work with everyday are second to none...right along with our product. If we're going to get sold, however, I'd rather do it once now instead of once now and once more with a downsized company full of RJ's later.
In the end though......I just work here.
...to see what comes of all this business in 4 or 5 years when TPG has had enough and NWA has had us under their thumb keeping us just the way we are now with the exception of a few more RJ's, which we all know are a virus to mainline.
I, for one, was looking forward to growth. And maybe, just maybe TPG will give us some but I have to believe that their is a NWA rat is this deal somewhere that will have the final laugh when all is said and done in a few years.
For the record, I love working here and the people I work with everyday are second to none...right along with our product. If we're going to get sold, however, I'd rather do it once now instead of once now and once more with a downsized company full of RJ's later.
In the end though......I just work here.
Kharma Police
Don't mess with Texas
- Joined
- Mar 16, 2004
- Posts
- 2,099
You will have to get permission from NWA before you get some new aircraft or any aircraft, maybe they will unload some of their 40 year old -9s for a good price. Best of luck, Chuck.
russtgol
........
- Joined
- May 25, 2007
- Posts
- 391
You must be as stupid as the music you listen too!!! I really dont think a investment company would buy Midwest just so NWA can keep them in check... They want to make money just like you Valuejet fools Dummy!!!!!
Kharma Police
Don't mess with Texas
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Well, I guess your union must be a-ok with the deal, right?!? Honestly, best of luck, Chuck, I think you will do just fine under NWA's watchful eye.
p.s. do you have any good Wisconsin polka songs I could sample?
russtgol
........
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- May 25, 2007
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- 391
Keep your sh!tty music in the ATL!!!!! Why do you think we never wanted you to take over in the first place!!!!
Kharma Police
Don't mess with Texas
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You must be a fan of Milwaukee's favorite sons, "The Violent Femmes". Talk about "sh!tty" music!
russtgol
........
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- Posts
- 391
No I just lived in the ATL for 4 years.... I really know Sh!tty music now... Who are the Femmes?
russtgol
........
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- May 25, 2007
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- 391
Kharma Police
Don't mess with Texas
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You got me, I was the youngest A-300 FO at EAL in MIA, only ten years old! They would have made me a Captain but I couldn't get my ATP, oh well!
grog_sit_reserv
Crashcave Lounger
- Joined
- Mar 28, 2003
- Posts
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"We hope that our industry experience, together with an expanded alliance with Northwest Airlines, will lead to a bigger and better Midwest," he said. It was not clear how big a stake Northwest has in the deal. The Eagan, Minn.-based airline has said it would not participate in Midwest's management should the TPG deal go through. It was not clear whether any airline operations would be combined.
Well thats an easy one.. A huge share.. You can pretty much rest assured that NWA just bought MEH using TPG as a front.. Its wonderful how easy it is to get around anti-trust laws....... Good luck MEH guys... I feer your gonna need it...
Well thats an easy one.. A huge share.. You can pretty much rest assured that NWA just bought MEH using TPG as a front.. Its wonderful how easy it is to get around anti-trust laws....... Good luck MEH guys... I feer your gonna need it...
freightdogfred
Malcontent
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- Nov 16, 2002
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- 990
deadstick
Pucker Factor: HIGH
- Joined
- Jul 27, 2002
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- 706
I think Skyway is going to get the short end of the stick. They decide in Sept if SkyWest brings another 10 CRJ's up to MKE. Yea great "growth," Timmy. MC operations and capacity might increase, but not the company. TH is quite the spin-master like his arch enemy JL.
What's the deal with the MEC reversal? I hear TH tried to pull a fast one.
There is a crack in the glass and it's leaking everywhere. EAS (da Beeches) ends when the $15/hr Great Lakes shows up and, let's see, there are 12 J328's and a possibility of 10 CRJ's coming in September....anybody paranoid?
CitationLover
Aw, Nuts!
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- 3,316
funnyman12
Well-known member
- Joined
- Sep 19, 2006
- Posts
- 289
If this is such a great deal for the pilots then why did ALPA rescind their support of management after this TGP deal? I know a few Midwest guys and they wanted Airtran. So the opinions of Midwest pilots varies greatly. Good luck but if I had a hub in MKE and DTW I sure as hell would see no sense in a Milwaukee hub. Kinda like Airtran opening a CLT hub.
Heard on the YX jumpseat the other day that Northwests minority share is to the tune of 40%. I don't care what NW says about operations. Midwest has been a pebble in their shoe for years. Time will tell. Good luck to all at YX. Midwest was always my #1 choice. I can't believe I eventually turned them down. I still wonder if it was a wise choice. As far as Airtran... lets see what happens in Indy. Good luck to those folks as well.
deadstick
Pucker Factor: HIGH
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Occam's Razor
Risible...ALWAYS risible
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No shortage of Airline Industry Experts here, eh?
Is CAL an independent operation...with a code-share agreement with NWA?
It is?
How is it possible CAL wasn't totally screwed after NWA bought controlling interest in March, 1998?
Don't let actual historical precedent confuse you guys. Back to the uninformed speculation!
Is CAL an independent operation...with a code-share agreement with NWA?
It is?
How is it possible CAL wasn't totally screwed after NWA bought controlling interest in March, 1998?
Don't let actual historical precedent confuse you guys. Back to the uninformed speculation!
IdRtherBsailing
Well-known member
- Joined
- Jan 17, 2006
- Posts
- 407
No, I think we will be just fine. To all the naysayers, let me just offer you this advice. " Better not take a dog on the space shuttle, because if he sticks his head out when you're coming home his face might burn up."
DASHDRIVER
Uber User
- Joined
- Dec 9, 2001
- Posts
- 265
DASHDRIVER
Uber User
- Joined
- Dec 9, 2001
- Posts
- 265
Highlights of conference call this morning. I missed the first 10Min but the important parts I got out of it are:
1. Firm Wall of separation between NW operations and management and Midwest.
2. NW relationship will be similar to agreement when they bought part of Continental from TPG.
3. TPG's exit strait seems to be one of two options. First do it like all of the other airline transactions they have been involved in. ie... slow ipo over the span of 5 to 11 years. Secondly a full sale to NW. Both were indicated to not be options for several years.
4. TPG will reap return on their investment by increasing profitability and growth of the airline. I did not hear any of it that may indicate how that growth may happen. Via mailine or other. In addition quite a bit of time was spent on the potential revenue generation produced by a NW code share especially for over seas ticket sales.
5. No one will release how much of Midwest NW owns.
6. TPG acknowledged the Midwest employee's being integral to the success of the plan. Moral being identified as a big thing to TPG. (Hopefully they will learn what not to do from current contract ramrod tricks)
7. TPG does not have any intensions to merge Midwest with any other carriers at this time. NW has a time (unspecified) limited golden bullet for additional sales like they do with Continential.
Thats about all I can remember. I guess there will be a conference call from the union tonight. I hope more light will be shed on the situation.
1. Firm Wall of separation between NW operations and management and Midwest.
2. NW relationship will be similar to agreement when they bought part of Continental from TPG.
3. TPG's exit strait seems to be one of two options. First do it like all of the other airline transactions they have been involved in. ie... slow ipo over the span of 5 to 11 years. Secondly a full sale to NW. Both were indicated to not be options for several years.
4. TPG will reap return on their investment by increasing profitability and growth of the airline. I did not hear any of it that may indicate how that growth may happen. Via mailine or other. In addition quite a bit of time was spent on the potential revenue generation produced by a NW code share especially for over seas ticket sales.
5. No one will release how much of Midwest NW owns.
6. TPG acknowledged the Midwest employee's being integral to the success of the plan. Moral being identified as a big thing to TPG. (Hopefully they will learn what not to do from current contract ramrod tricks)
7. TPG does not have any intensions to merge Midwest with any other carriers at this time. NW has a time (unspecified) limited golden bullet for additional sales like they do with Continential.
Thats about all I can remember. I guess there will be a conference call from the union tonight. I hope more light will be shed on the situation.
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