Gives Final 'No' To AirTran

One saga is finally over... but a new one is just beginning. Nine months after AirTran Airways first voiced its intent to take over Midwest Airlines, the Board of Directors of Midwest Air Group said Sunday it has unanimously determined to pursue a buyout offer -- and not from AirTran. TPG Capital, L.P. offered to acquire all of the outstanding shares of Midwest for $16.00 per share.

The board took its action after receiving a letter from AirTran Holdings, Inc. in which AirTran stated it was making its best and final offer to acquire all of the outstanding shares of Midwest pursuant to a one-step merger for consideration consisting of cash and stock at $15.75 per share, valued at Friday's closing price of AirTran's common stock. The offer was $.75 per share greater than the airline's previous "best" offer.

The board determined the TPG offer presented greater value and certainty for Midwest shareholders than the AirTran offer... but jilted AirTran begged to differ.

"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," the airline said in a statement to Reuters.

Though no official announcement has been made, many believe the 'passive' investor in the TPG deal is none other than Northwest Airlines. As ANN reported, Northwest was reportedly considering a passive stake in the airline, in part to protect a marketing deal signed earlier this year.

Under the terms of the offer from TPG, the private equity investor indicated that its acquisition "would permit the Company to continue its rich legacy as a leading provider of customer oriented quality air service."

Midwest and TPG expect to execute a definitive merger agreement no later than August 15, 2007.

FMI: www.nwa.com, www.midwestairlines.com, www.airtran.com