Originally Posted by
Radar
Airtran's offer raised to $16.25... kind of nice to see somebody other than the pilot group get whipsawed. Seriously though, Midwest is so amazingly mismanaged that if Northwest just wanted to keep them out of the way the best thing they could do is buy them and let them wander about on their own.
Here's the article:
AirTran ups the ante in Midwest bidding war
Wednesday August 15, 2007
AirTran Holdings raised its bid for Midwest Air Group late yesterday, offering $16.25 per share in cash and stock, exceeding the $16 per share cash offer from TPG Capital and Northwest Airlines that was endorsed unanimously by the Midwest board Sunday
(ATWOnline, Aug. 14).
AirTran estimated the total value of its new offer at $445 million. "Midwest's shareholders are concerned that the acquisition of Midwest by a private equity firm, along with Northwest Airlines, will block competition, raise fares, reduce employment levels and reduce service," AirTran Chairman and CEO Joe Leonard said. He reiterated that antitrust issues could prevent a TPG/Midwest deal from closing. The new offer comprises $10 cash per share and 0.6056 share of AirTran common stock.
Pequot Capital Management, an investment firm that holds an estimated 8.8% of Midwest, urged the company to reconsider its decision to support TPG's bid, saying it still believed that AirTran would be the better choice, according to press reports. Midwest did not release a statement yesterday.
Analysts at Raymond James & Assoc. said Northwest's involvement was designed to keep a low-cost competitor out of its Midwestern US stronghold. "Northwest, in our view, would dismantle Midwest over time and integrate its operations into Northwest," the report said.
by Sandra Arnoult