'Nevermind' - AirTran back in Midwest hunt

Remember the Saturday Night Live character, Rosanne Rosannadana? Her classic comeback to every dilemma was "Nevermind". A scant three days after saying it had “terminated negotiations” for the takeover of Midwest Airlines, the line might apply to discount airline AirTran Airways. The carrier is back in the bidding for Midwest, with yet another sweetened offer.

Last weekend, Midwest’s Board of Directors said it would pursue an offer by TPG Capital to take over the airline, an all-cash offer backed — in part — by a passive investment by Northwest Airlines. Northwest pledged it would participate neither in the management nor control of Midwest should the deal get done.

Now, Joe Leonard, AirTran Chairman and CEO, contends: “Midwest’s shareholders are convinced that the acquisition of Midwest by a private equity firm, along with Northwest Airlines, will block competition, raise fares, reduce employment levels and reduce service.”

Thus, a new AirTran offer of $16.25 per share, one that trumps TPG’s $16 per share offer.

Leonard cast doubts as to whether the TPG/Norwest–Midwest deal would ever be consummated because of “anti-trust issues”. Historically, Northwest Airlines has been the prime player in the Upper Midwestern part of the United States, and Midwest Airlines has been a key competitor.

Midwest’s Board of Directors says it will take AirTran’s latest offer "under consideration”.

© Cheapflights Ltd Jerry Chandler