jetflier
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This is a qoute from the Atlanta business Chronicle article http://www.bizjournals.com/atlanta/stories/2007/08/13/daily2.html?b=1186977600^1505448
Midwest to pursue acquisition by equity investor, Northwest Airlines
Atlanta Business Chronicle - 7:27 AM EDT Monday, August 13, 2007
Midwest Air Group Inc. will pursue an all-cash offer from a private equity investment group, including Northwest Airlines, for $16 per share, ending a hostile takeover attempt by AirTran Holdings Inc.
The investors group, led by TPG Capital, of Fort Worth, Texas, would convert Midwest Air to a privately held company, leaving Chairman and CEO Timothy Hoeksema in place, according to a statement issued Sunday evening.
In a separate statement, Minneapolis-based Northwest Airlines confirmed its involvement in the deal, saying it is a "passive investor." Northwest said it is "providing financing to facilitate the transaction," but will not participate in the management or control of Midwest should TPG acquire Midwest.
A previously announced codeshare agreement between Northwest and Midwest Airlines will remain in place and the two airlines will explore cost reduction activities such as joint fuel purchasing, according to the statement.
The group expects to execute a merger agreement no later than Aug. 15, according to a letter released by Midwest.
"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," TPG Capital stated in the letter "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."
TPG said it is one of the largest private equity investors in the world and the most experienced private equity investor in the global airline sector. It said it has investments in the airline industry including Continental Airlines, America West Airlines, Ryanair, Hotwire and Sabre.
The announcement came one hour after AirTran announced it had ended negotiations with Midwest Air Group and let its tender offer to purchase Midwest shares has expired. At the time, the cash and stock offer was valued at $15.75 a share, or about $431 million, based on the value of AirTran's stock, AirTran said Sunday.
"We are disappointed that the Midwest board has rejected our enhanced offer. We believe that a merger of AirTran and Midwest was a compelling strategic combination with similar fleets, complementary route networks, growth and advancement opportunities for employees and economic benefits to the communities we serve," said Joe Leonard, chairman and CEO of AirTran Holdings.
In the statement, Leonard also doubted that the Midwest/TPG/Northwest transaction could even be completed under antitrust regulations.
"(T)he Midwest board has chosen a path that will benefit current senior management by selling out to a private equity firm and a so- called 'passive' investor whose involvement will surely raise antitrust concerns, casting doubt for shareholders on whether a transaction can, in fact, close," Leonard said. "Furthermore, private equity investors are laser focused on generating short-term returns and the only way to accomplish that goal is to slash costs by cutting back on service and eliminating jobs."
AirTran's tender offer expired Aug. 10. That night, the airline said shareholders had offered to tender 62.7 percent of Midwest's shares for the offer.
Atlanta Business Chronicle - 7:27 AM EDT Monday, August 13, 2007
Midwest Air Group Inc. will pursue an all-cash offer from a private equity investment group, including Northwest Airlines, for $16 per share, ending a hostile takeover attempt by AirTran Holdings Inc.
The investors group, led by TPG Capital, of Fort Worth, Texas, would convert Midwest Air to a privately held company, leaving Chairman and CEO Timothy Hoeksema in place, according to a statement issued Sunday evening.
In a separate statement, Minneapolis-based Northwest Airlines confirmed its involvement in the deal, saying it is a "passive investor." Northwest said it is "providing financing to facilitate the transaction," but will not participate in the management or control of Midwest should TPG acquire Midwest.
A previously announced codeshare agreement between Northwest and Midwest Airlines will remain in place and the two airlines will explore cost reduction activities such as joint fuel purchasing, according to the statement.
The group expects to execute a merger agreement no later than Aug. 15, according to a letter released by Midwest.
"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," TPG Capital stated in the letter "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."
TPG said it is one of the largest private equity investors in the world and the most experienced private equity investor in the global airline sector. It said it has investments in the airline industry including Continental Airlines, America West Airlines, Ryanair, Hotwire and Sabre.
The announcement came one hour after AirTran announced it had ended negotiations with Midwest Air Group and let its tender offer to purchase Midwest shares has expired. At the time, the cash and stock offer was valued at $15.75 a share, or about $431 million, based on the value of AirTran's stock, AirTran said Sunday.
"We are disappointed that the Midwest board has rejected our enhanced offer. We believe that a merger of AirTran and Midwest was a compelling strategic combination with similar fleets, complementary route networks, growth and advancement opportunities for employees and economic benefits to the communities we serve," said Joe Leonard, chairman and CEO of AirTran Holdings.
In the statement, Leonard also doubted that the Midwest/TPG/Northwest transaction could even be completed under antitrust regulations.
"(T)he Midwest board has chosen a path that will benefit current senior management by selling out to a private equity firm and a so- called 'passive' investor whose involvement will surely raise antitrust concerns, casting doubt for shareholders on whether a transaction can, in fact, close," Leonard said. "Furthermore, private equity investors are laser focused on generating short-term returns and the only way to accomplish that goal is to slash costs by cutting back on service and eliminating jobs."
AirTran's tender offer expired Aug. 10. That night, the airline said shareholders had offered to tender 62.7 percent of Midwest's shares for the offer.
