Midwest Merger With TPG Gains Shareholder Approval

Shareholders of Midwest Air Group Inc. approved a $450 million takeover by Forth Worth-based private equity firm TPG Capital. Although the deal was endorsed by the majority of shareholders, the sale of Midwest Airlines is still pending antitrust inspection since it involves competitor Northwest Airlines Corp. as a passive investor.

Discussions leading to the deal started in August when the airliner and TPG settled in $17 a share in cash for its 26.6 million outstanding shares.

Previously, suitors AirTran Holdings Inc., attempted to strike a deal with Midwest. However, its final offer was $10 per share in cash and 0.6056 of a share of AirTran stock for each Midwest share, making the total value reliant on the price of AirTran shares. In August, the deal would have been valued at $445 million.

The choice for TPG was rooted in Midwest willingness to remain independent and maintain its brand identity.
According to the Associated Press, TPG advanced 53 percent of the purchase price, or $238.1 million. Northwest pledged to pay 47 percent, or nearly $213.3 million, according to filings with the Securities and Exchange Commission. The airline, which emerged from bankruptcy in May, has said it won't participate in Midwest's management.
The Associated Press reported that Midwest managers have said they are positive federal authorities will approve the deal. Midwest said it expects the transaction to be completed in the fourth quarter of 2007.