Midnight Mike
2007-08-13, 01:55 AM
-TPG Capital, Northwest in takeover bid for Midwest Air
Mon Aug 13, 2007 1:43AM EDT
NEW YORK, Aug 13 (Reuters) - Midwest Air Group (MEH.A: Quote, Profile, Research) said it will pursue a takeover offer, likely to exceed $400 million, from U.S. private equity firm TPG Capital, which includes a passive investment from the U.S. No 5 airline Northwest Airlines.
The $16 per share all-cash offer for the Milwaukee, Minnesota-based Midwest tops the roughly $389 million earlier $15.75 per share cash-and-stock offer from AirTran Airways (AAI.N: Quote, Profile, Research).
TPG's offer, which Midwest said is subject to a final value calculation but will likely exceed $400 million, represents a 12.5 percent premium to Midwest's closing share price of $14.23 a share on Friday on the American Stock Exchange.
The transaction is not subject to financing conditions, TPG said in its offer letter to Midwest -- a key consideration given recent credit market turmoil that has created bumpy conditions for other private equity deals.
Midwest and TPG, which has a history of investing in airlines, including approaches earlier this year in the European airline sector, expect to sign a definitive merger agreement by August 15, Midwest said in a statement late on Sunday.
Northwest (NWA.N: Quote, Profile, Research) said its investment, for an undisclosed amount, will facilitate the transaction but it added that it has no plans to participate in the management or control of Midwest if TPG is successful in its takeover bid.
Orlando, Florida-based AirTran, the No. 10 U.S. airline, said earlier it was walking away from its hostile bid to acquire Midwest in light of the rival takeover offer. But it said that TPG's offer, given the passive investment from Northwest, could raise antitrust concerns, which could make it more difficult for the transaction to win regulatory approval.
TPG, in its letter to Midwest, said it does not anticipate any issues in obtaining antitrust clearance or other regulatory approvals.
Airline analysts have said the industry needs consolidation to reduce excess seats and capacity so airlines can raise fares and derive savings from combining their operations.
Northwest said a code share agreement with Midwest will remain in place, and post-merger the two airlines could explore cost reductions such as joint fuel purchasing.
Mon Aug 13, 2007 1:43AM EDT
NEW YORK, Aug 13 (Reuters) - Midwest Air Group (MEH.A: Quote, Profile, Research) said it will pursue a takeover offer, likely to exceed $400 million, from U.S. private equity firm TPG Capital, which includes a passive investment from the U.S. No 5 airline Northwest Airlines.
The $16 per share all-cash offer for the Milwaukee, Minnesota-based Midwest tops the roughly $389 million earlier $15.75 per share cash-and-stock offer from AirTran Airways (AAI.N: Quote, Profile, Research).
TPG's offer, which Midwest said is subject to a final value calculation but will likely exceed $400 million, represents a 12.5 percent premium to Midwest's closing share price of $14.23 a share on Friday on the American Stock Exchange.
The transaction is not subject to financing conditions, TPG said in its offer letter to Midwest -- a key consideration given recent credit market turmoil that has created bumpy conditions for other private equity deals.
Midwest and TPG, which has a history of investing in airlines, including approaches earlier this year in the European airline sector, expect to sign a definitive merger agreement by August 15, Midwest said in a statement late on Sunday.
Northwest (NWA.N: Quote, Profile, Research) said its investment, for an undisclosed amount, will facilitate the transaction but it added that it has no plans to participate in the management or control of Midwest if TPG is successful in its takeover bid.
Orlando, Florida-based AirTran, the No. 10 U.S. airline, said earlier it was walking away from its hostile bid to acquire Midwest in light of the rival takeover offer. But it said that TPG's offer, given the passive investment from Northwest, could raise antitrust concerns, which could make it more difficult for the transaction to win regulatory approval.
TPG, in its letter to Midwest, said it does not anticipate any issues in obtaining antitrust clearance or other regulatory approvals.
Airline analysts have said the industry needs consolidation to reduce excess seats and capacity so airlines can raise fares and derive savings from combining their operations.
Northwest said a code share agreement with Midwest will remain in place, and post-merger the two airlines could explore cost reductions such as joint fuel purchasing.