Aug
15
AirTran Airways yesterday revived it’s bid for a hostile takeover of Midwest Airlines. The bid has been upped to $445 million! This new bid comes out less than 48 hours after AirTran let their previous offer expire. From the USAToday:
On Sunday, AirTran dropped out of the bidding for Midwest, which it started in December. It pulled out rather than try to outbid Fort Worth-based TPG, the takeover firm headed by David Bonderman. Previously known as Texas Pacific Group, TPG has invested in several airlines since it took over a then-bankrupt Continental Airlines in the early 1990s.
Before Sunday, AirTran was offering $9.50 a share plus just over half a share of AirTran stock for each Midwest share to be bought. It then made a supposedly final cash-and-stock offer worth $15.50 per Midwest share, or about $431 million, that was beaten by TPG’s all-cash offer worth $400 million.
AirTran President Bob Fornaro said his carrier dropped out of the bidding at that point because, “We didn’t want to be a stalking horse for some other bidder.” But late Tuesday, just after stock trading ended on Wall Street, AirTran jumped back into the battle with its $16.25-a-share offer.
Fornaro said AirTran officials studied the TPG/Northwest offer and plans, and heard from Midwest shareholders, employees and some people in the Milwaukee community. Those people, he said, fear a TPG/Northwest takeover will mean service reductions at Milwaukee, lost jobs and reduced economic activity for Milwaukee, and higher travel prices for consumers.
For TPG to get the kind of returns it normally gets from its investments in airlines and other companies, Midwest would have to shrink significantly, Fornaro said. And that appears to be fine with TPG’s investment partner Northwest, he added.
AirTran really wants to merge with Midwest. I think the industry is going to have realize this is what is going to create jobs and keep airlines flying.
So, what do you think of the new bid for Midwest by AirTran?
This happens all thetime in the UK = hostile share grabbing etc.