AirTran Back in the Bidding for Midwest

AirTran Holdings Inc. on Tuesday offered $16.25/share in cash and stock for Midwest Air group, renewing its efforts to take over the Milwaukee-based carrier. On Sunday AirTran had said it was abandoning its previous $15.75/share cash and stock bid for the carrier after Midwest said it would pursue a deal with TPG capital, that would include Northwest Airlines as a passive investor. The new AirTran bid is worth $445M, $14M more than its previous $431M offer, and also is above the $16/share, $400M, all-cash bid from TPG. Midwest said it would take the revised offer under consideration. AirTran COO Bob Fornaro told Reuters, "They believe our deal is superior." Meanwhile, Pequot Capital Management, a Connecticut hedge-fund manager that owns 8.8% of Midwest, said it had "significant concerns" with Midwest's decision to pursue the TPG bid, saying it was not convinced that the taxable, all-cash bid was superior to even the earlier AirTran offer. The new offer is the fourth time AirTran has raised its bid since it made its overture public last December. It said it was prompted to revive the bid because of "urging" by a "substantial number" of Midwest shareholders.

Sources: Press release, MarketWatch, Reuters, AP, Wall Street Journal
Commentary: Midwest to Take Off With TPG Capital, Northwest • Top Shareholder Urges Midwest To 'Seriously Engage' AirTran's Offer
Stocks/ETFs to watch: AAI, MEH, NWA

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