Midwest Air Group (MEH) signed a definitive merger agreement to be acquired by an affiliate of TPG Capital, L.P. in a transaction valued at approximately $450 million. The merger agreement was unanimously approved by its board. As a result, AirTran (AAI) ended its year-long effort to acquire the Milwaukee-based carrier and establish a Midwestern base. Northwest Airlines (NWA) is a minority, passive investor in Midwest Air Partners, LLC, the entity formed to acquire Midwest. The TPG proposal was weighed against a proposal from AirTran of $16.27 per share in cash and AirTran stock, resulting from a request by Midwest for both parties to submit their best and final offer. The transaction is expected to be completed in the fourth quarter.
Under the terms of the agreement, each outstanding share of Midwest's common stock will be converted into the right to receive $17.00 per share in cash. Last December, when AirTran announced its intention to acquire MEH, the per-share price of Midwest's common stock was $9.08. Midwest has approximately 26.6 million shares outstanding, including shares subject to options, restricted share awards and outstanding warrants. All financing for the transaction is in the form of equity and has been committed. No debt financing is required. The transaction is subject to approval by Midwest's shareholders and anti-trust approvals.
TPG Capital is the global buyout group of TPG, a leading private investment firm founded in 1992, with more than $30 billion of assets under management. TPG Capital's investments span a variety of industries including travel, technology, retail/consumer, media and communications, industrials, financial services and healthcare.
Richard P. Schifter, partner, TPG Capital, added, "TPG is excited about the opportunity to invest in Midwest Airlines, which has managed to preserve a quality of service to its passengers rarely seen today. We look forward to working with management and its highly motivated workforce in driving growth and creating more value. We hope that our industry experience, together with an expanded alliance with Northwest Airlines, will lead to a bigger and better Midwest."