Aug 17, 2007 2:31 pm US/Central
NWA Could Eventually Own Midwest After Sale To TPG
Milwaukee, Wis. (AP) ―
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Midwest's decision to sell to TPG came late Thursday night and ended months of back-and-forth with another rival, AirTran Holdings Inc. (File)
AP
Northwest Airlines Corp. could end up owning rival Midwest Air Group Inc., which has agreed to sell to private equity firm TPG Capital.
Northwest is a passive investor in the deal and may eventually buy Midwest outright, TPG partner Richard P. Schifter said in a conference call Friday morning.
The equity firm may eventually want to cash out of the deal, he said, and Minneapolis-based Northwest could be the sole owner. But Schifter cautioned that could be several years out.
Midwest's decision to sell to TPG came late Thursday night and ended months of back-and-forth with another rival, AirTran Holdings Inc.
Midwest said TPG will pay $17 per share cash, which values the deal at $450 million based on Midwest's 26.6 million shares outstanding.
Orlando, Fla.-based AirTran's hostile takeover attempt of Midwest stretched back two years to an initial bid of $78 million in June 2005.
Its last offer, a cash-and-stock deal, was worth about $16.04 a share, or $427 million.
AirTran Chairman and CEO Joe Leonard said Friday in a statement that he had hoped to reach a consensual agreement with Midwest but added, "we accept the Midwest board's decision."
AirTran shares rose 20 cents, or 2 percent, to $10.18 in midday trading Friday while Midwest shares rose 77 cents, or 5.2 percent, to $15.48. Northwest shares slipped 3 cents to $15.95.
(© 2007 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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