Raises Bid For Fourth Time In Eight Months 'At Request Of Shareholders'

It STILL isn't over... and we're starting to wonder if it ever will be. After being soundly rejected by Midwest Airlines in its quest to take over that carrier, on Tuesday AirTran Holdings Inc. raised its offer to buy the airline by three percent. The last-ditch bid works out to about $445 million, or $16.25 per share.

As ANN reported, Midwest Air Group, parent company of Midwest Airlines, opted Sunday to pursue a buyout offer by TPG Capital, L.P. The consortium, which offered $16 per share, is backed by Northwest Airlines.

According to Reuters, however, Pequot Capital Management Inc. -- a large shareholder in Midwest -- has since objected to the TPG offer. That presented an opportunity for AirTran to jump in, after the airline allowed its previous $15.75 per-share bid in Midwest expire.

"We believe an announced deal with Midwest would cause the value of the AirTran offer to exceed, in a very short time, the $16 indication of interest you have currently deemed to be superior," Pequot Capital said in the letter to Midwest's board, filed with the US Securities and Exchange Commission.

AirTran Chief Operating Officer Bob Fornaro said AirTran raised its offer for Midwest -- for the fourth time since December 2006 -- at the request of Midwest shareholders.

"They believe our deal is superior," Fornaro said.

Midwest management has said repeatedly it wants to operate as a stand-alone airline -- something the TPG offer would allow it to do. If AirTran wins, the airline would be absorbed into the Atlanta-based low-cost carrier's operations.

The current offer has no expiration date, Fornaro added... meaning AirTran plans to hang tough in this fight. It ain't over yet, folks.

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