Midwest NOT sold to AirTran

deadstick

deadstick

Well-Known Member
So is NWA the "passive" investor?


AirTran Holdings, Inc., Allows Midwest Tender Offer to Expire
Sunday August 12, 9:55 pm ET - Negotiations with Midwest Have Ended After Midwest Board Rejects Enhanced Offer -

ORLANDO, Fla., Aug. 12 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc. (NYSE: AAI - News) the parent of AirTran Airways, today announced that negotiations with Midwest Air Group, Inc. (Amex: MEH - News) have ended and AirTran's tender offer to purchase Midwest shares has expired.

"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 Airways. "For the good of our shareholders and Crew Members, we have terminated negotiations and allowed our tender offer to expire. At this time, we will focus our efforts on AirTran's strategic plan that has resulted in eight years of successful growth.

"The Midwest board has chosen to ignore the overwhelming majority of shareholders' wishes to merge with AirTran, a partner with whom Midwest could have grown and become a national carrier, including our commitment to provide employment protection and more jobs for its employees and more choices for its customers. Instead, the 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. 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. If the Midwest board is successful in selling the company to a private equity investor, the Midwest employees should be concerned about their job security and Midwest's customer service is sure to suffer," stated Leonard.
Under the terms of the enhanced offer, AirTran proposed to acquire all Midwest common stock for $15.75 a share, based on the closing price of AirTran common stock on August 10, 2007. The offer consisted of $9.50 in cash and 0.5842 shares of AirTran common stock for each Midwest share. The total equity value of the transaction would have been in excess of $431 million.
 
Midwest and Air Tran would have been a match made in hell, having worked for a Midex subsidiary and knowing the corporate culture.

It would have made USAir+America West look like a consensual scrog-fest.

I'll betchya there's a sigh of relief from Brown Deer all the way down to Kenosha this evening.
 
Just like the US Air - Delta proposal, my guess is this NWA thing is a way for NWA to flush the birds out of the field so to speak. It would also be a way of making a hostile takeover more expensive. IOW, it's a just a bluff by NWA IMO. Poor Midwest is just a pawn.
 
Midwest isn't the pawn, the poor employees are brudda.

Midwest isn't Tim Hoeksema, it's the average Joe throwing bags, serving meals and doing Cat-II approaches.
 
Doug Taylor said:
Midwest isn't the pawn, the poor employees are brudda.

Midwest isn't Tim Hoeksema, it's the average Joe throwing bags, serving meals and doing Cat-II approaches.
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Very true.

I have a bad feeling about the future of MEH, Skyway specifically. NWA says it'll stay out of operations (if this goes through they might have to), but they compete in many markets now.

I see this as a quick cash-out to satisfy the stock holders who wanted AirTran, but the long-term growth is in question (for me at least). This was a block by NWA to keep AAI out of their backyard. Do they have an interest in growing Midwest, or just cutting low-cost competition?
 
deadstick said:
So is NWA the "passive" investor?


...........
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Yep, That is correct:

NWA invests in Midwest

The cash purchase thwarts low-fare AirTran in its hostile bid to expand its regional presence.

By Liz Fedor, Star Tribune

Northwest Airlines disclosed Sunday night that it is joining forces with a private equity firm that submitted the winning bid to acquire Milwaukee-based Midwest Air Group.

In making this move, Northwest succeeded in blocking AirTran Airways, an Orlando-based low-fare carrier, from developing a major competitive foothold in the Upper Midwest.

Joe Leonard, CEO of AirTran, has been pursuing Midwest for months, and he had promised to merge the two carriers and expand jobs and routes after taking delivery of new Boeing airplanes.

Northwest emphasized that it will be a "passive investor" in the deal that was developed by TPG Capital, L.P. That private equity company offered $16 per share in cash, or about $440 million. It successfully outbid AirTran, which increased its final offer to $15.75 per share in cash and stock.

"NWA, which is providing financing to facilitate the transaction, will not participate in the management or control of Midwest should TPG acquire Midwest," Northwest said in a release late Sunday night.

As a passive investor, Northwest is not merging with Midwest. Consequently, Northwest will not be melding its employees with the Midwest workforce, because this transaction is not structured as a merger for Northwest.

The board of directors of Midwest Air Group unanimously decided on Sunday to pursue the all-cash offer from TPG Capital. The parties hope to consummate the deal with a definitive merger agreement by Aug. 15.

Midwest caters to business travelers -- offering amenities such as leather seats and freshly baked cookies. Midwest turned a profit of $5.4 million last year on $665 million in operating revenue, after losing $64.9 million in 2005.

Midwest offers four daily flights from the Twin Cities to Milwaukee. Like AirTran, it operates out of the Humphrey terminal at Minneapolis-St. Paul International Airport. AirTran operates 12 daily flights from the Twin Cities to Chicago, Atlanta and Orlando.

Northwest did not immediately say how much money it is investing in this deal, nor did the carrier elaborate on what type of business rewards it expects.

In May, Northwest announced that it had reached a code-sharing agreement with Midwest Airlines. Northwest has similar arrangements with Delta Air Lines and Continental Airlines. Under a code-sharing agreement, both carriers are able to extend their route networks and consumers can plan trips as if they are traveling on only one airline.

Midwest and Northwest sang the praises of the TPG Capital deal, but it was blasted by AirTran's Leonard.

"The 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," Leonard said in a prepared statement. Leonard was referring to Northwest's involvement in the deal, and its ability to stymie the expansion of low-fare competition by preventing AirTran from acquiring Midwest.

Leonard is a former Northwest executive.

Northwest has a strong presence in the Milwaukee market.


Liz Fedor • 612-673-7709 • lfedor@startribune.com
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NWA has been after more ops in MKE for a while. There was talk of a future PCL base in MKE, then suddenly, flights were cut back into there and increased in IND. Now, IND is rumored to be a future base.

I could see them getting Midwest, then using the 717 to replace the DC-9s.
 
Northwest was a staple in Milwaukee for a long time. They had their chance. Working with an investment group that is buying us won't give them more of a chance to make money flying out of here. It just shows that they agree that AirTran could have meant less Northwest and definitely less Midwest at MKE.
 
falconvalley said:
Northwest was a staple in Milwaukee for a long time. They had their chance. Working with an investment group that is buying us won't give them more of a chance to make money flying out of here. It just shows that they agree that AirTran could have meant less Northwest and definitely less Midwest at MKE.
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That was before they beat their labor groups with the bankruptcy stick and cut costs.....
 
Re: Midwest NOT sold to AirTran--STOP THE PRESSES!!!

This just got really interesting...:drool:

AirTran Holdings, Inc., Presents New Offer For Midwest Air Group, Inc.
Tuesday August 14, 4:30 pm ET
- After Urging from Midwest Shareholders, AirTran Increases Bid -

ORLANDO, Fla., Aug. 14 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc. (NYSE: AAI - News) the parent of AirTran Airways, today announced that, at the request of Midwest shareholders, AirTran has increased its offer for Midwest Air Group (Amex: MEH - News), to $16.25 per share in a negotiated merger transaction.

The offer includes $10.00 per share in cash and 0.6056 of a share of AirTran common stock. Based on the closing price of AAI on August 13, 2007, the total value of AirTran's increased offer represents approximately $445 million.

"Owners of Midwest recognize the overwhelming benefits of forming a truly national, low-cost, efficient carrier that will add flights, increase jobs and lower fares," said Joe Leonard, AirTran Airways Chairman and CEO. "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.

"There is very serious concern among Midwest stakeholders that their interest and those of Midwest employees and communities will not be well served by the proposed acquisition of Midwest by the private equity/Northwest group and that, in any event, antitrust issues may prevent a deal with Northwest from ever closing," Leonard said. "Clearly, our increased offer represents more value and the best course for the future for Midwest owners, employees and customers."
 
Re: Midwest NOT sold to AirTran--STOP THE PRESSES!!!

Dang. Last I heard Midwest was gonna take the offer with NWA and Co. Now Airtran is upping that by $.25 per share. The only real difference is the other offer is all cash. The AirTran offer is based on a split of cash and shares. Honestly, if I were a shareholder, I'd be more for the cash/shares deal. It's got more potential to put money in my pocketbook.

AirTran must want this badly, despite the fact they said they wouldn't get in a bidding war.
 
kellwolf said:
I could see them getting Midwest, then using the 717 to replace the DC-9s.
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There aren't enough 717s in the world to replace the NWA DC-9 fleet. We're the largest operator, and even we only have 87 of them. Boeing didn't try to sell them at all after the purchase of MD because they viewed it as a competitor to their own 737 line. It's a great airplane, but it certainly won't be replacing the NWA DC-9 fleet.
 
Guess you're right. THe Emb-170s and CRJ-900s will be replacing the -9s probably. I was dreaming that mainline might actually keep something.
 
n57flyguy said:
Why is that?
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It seemed to me on paper an AirTran/Midwest deal made sense, comparitively speaking. Like fleets, a route system that would be complimentary and allow for growth into other markets - and like it or not - AirTran on average compared to others seems to have a solid based game plan.

Anyone getting involved with Northwest, well, flush that operation down the same toilet NWA is flowing down.



Max
 
Mr.Maximus said:
It seemed to me on paper an AirTran/Midwest deal made sense, comparitively speaking. Like fleets, a route system that would be complimentary and allow for growth into other markets - and like it or not - AirTran on average compared to others seems to have a solid based game plan.

Anyone getting involved with Northwest, well, flush that operation down the same toilet NWA is flowing down.



Max
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Yea, not sure why Doug and others have said a merger would be bad for both airlines.

In my limited opinion the merger/acquisition with NWA and the private firm would be far worse to MEH. As they'd slash routes, cut cost and employee salaries and most assuredly lay people off.

Not to mention the whole anti trust issues in this deal with limited growth, no competion and higher ticket prices.

To me sounds like MEH employee and customers lose big if this goes through!

On another board, they're saying that if AAI and MEH don't merger that SWA is taking a serious look at Air Tran!
 
Mergers ALWAYS suck for the average employee.

"We're going to do your job a new way now!"

"But the new way doesn't work as well as the old way though"

"Do it anyway, we bought you fair 'n square. Our rules now".

"You suck!"

"YOU suck!"

"Ammo stab you!"

"Ammo stab YOU first!"

(rinse...repeat...)
 
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