n917me
Posts: 492
Joined: Tue Feb 08, 2005 9:18 am

MEH Signs A Definitive Agreement With.....

Fri Aug 17, 2007 5:56 pm

The fat lady is singing!!!!!!

To: All Midwest and Skyway Airlines Employees
Date: August 16, 2007
From: Timothy E. Hoeksema
Subject: Midwest Signs Definitive Merger Agreement With TPG

I am pleased to share the news today that the board of Midwest Air Group has signed a definitive merger agreement for our company to be acquired by an affiliate of TPG Capital, L.P. This preserves our status as Milwaukee's hometown airline and our Midwest Airlines brand.

This transaction is valued at approximately $450 million. Under the terms of the agreement, each outstanding share of Midwest's common stock will be converted into the right to receive $17.00 in cash.

This is a significant milestone for Midwest. Our board put forth tremendous effort to carefully and thoroughly evaluate the alternatives. The board is confident that TPG's offer presents the best value and certainty for shareholders, while also addressing the interests of employees.

TPG is a leading private investment firm founded in 1992, with more than $30 billion of assets under management and offices all over the globe. They have extensive experience in the airline industry and many other sectors. TPG shares our commitment to quality and understands the value of a differentiated product. We're looking forward to a long-term relationship with them and benefiting from their strength and experience.

The decision to accept the TPG offer came at the conclusion of a process in which TPG and AirTran were each asked to submit a "best and final" offer by noon Central time on August 16, 2007. At that time, TPG submitted its $17.00 per share proposal.

Northwest Airlines Corporation will be a minority passive investor in Midwest Air Partners, LLC, the name of the entity formed to acquire Midwest.

The transaction is expected to be completed in the fourth quarter of 2007.

Going forward, I'm sure you will have questions regarding specific details of the transaction and what it means to you. Please share your questions with your manager or supervisor, who will submit them to Corporate Communications. We will compile those questions and share the answers with you in the coming days and weeks.

This agreement is the result of 23 years of hard work, dedication and enthusiasm by Midwest employees who made "The best care in the air" what it is today. Congratulations! Please take the time to enjoy this news and look forward to the possibilities ahead.


In connection with Midwest's solicitation of proxies with respect to the meeting of shareholders to be called with respect to the proposed merger, Midwest will file with the SEC, and will furnish to shareholders of Midwest, a proxy statement. Midwest's shareholders are urged to read the proxy statement when it is finalized and distributed to shareholders because it will contain important information. Shareholders will be able to obtain a free-of-charge copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC's Web site at http://www.sec.gov. Shareholders will also be able to obtain a free-of-charge copy of the proxy statement and other relevant documents (when available) by directing a request by mail or telephone to Midwest Air Group, Inc., 6744 South Howell Avenue, Oak Creek, Wisconsin 53154, Attention: Investor Relations, Telephone: 414-570-3954, or from Midwest's Web site, http://www.midwestairlines.com.

Midwest and certain of its directors, executive officers and other members of management and employees may, under the rules of the SEC, be deemed to be "participants" in the solicitation of proxies from shareholders of Midwest in favor of the proposed merger. Information regarding the persons who may be considered "participants" in the solicitation of proxies will be set forth in Midwest's proxy statement when it is filed with the SEC. Information regarding certain of these persons and their beneficial ownership of Midwest common stock as of March 26, 2007 is also set forth in the Schedule 14A filed by Midwest with the SEC on May 16, 2007.

Statements about the expected timing, completion and effects of the proposed merger and all other statements in this release, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Midwest may not be able to complete the proposed merger on the terms described above or other acceptable terms or at all because of a number of factors, including the failure to obtain shareholder approval or the failure to satisfy the closing conditions. These factors, and other factors that may affect the business or financial results of Midwest are described in the risk factors included in "Item 1A. Risk Factors" in Midwest's "Annual Report on Form 10-K" for the year ended December 31, 2006.
 
notdownnlocked
Posts: 929
Joined: Sun Sep 03, 2000 1:45 pm

RE: MEH Signs A Definitive Agreement With.....

Fri Aug 17, 2007 6:53 pm

Shall we take bets on how many minutes will pass until FL again changes their minds and makes another offer?
 
wcs
Posts: 180
Joined: Fri Apr 27, 2007 4:55 am

RE: MEH Signs A Definitive Agreement With.....

Fri Aug 17, 2007 7:00 pm

Hi,

If I read it well, the deal is done now :

Quoting N917me (Thread starter):
Midwest Air Group has signed a definitive merger agreement for our company to be acquired by an affiliate of TPG Capital, L.P

Last week, TPG was committed with some sort of MoU. They by the way increased their offer by a extra $1, after the $.25 one by AirTran two days ago. It's a sign that TPG is highly committed in that case, and I'm uncertain that AirTran will follow now ...

Stay tuned!

[Edited 2007-08-17 12:02:24]
FLY SKYTEAM JETS
 
n917me
Posts: 492
Joined: Tue Feb 08, 2005 9:18 am

RE: MEH Signs A Definitive Agreement With.....

Fri Aug 17, 2007 8:29 pm

It is signed ..sealed and delivered...
 
CitrusCritter
Posts: 770
Joined: Wed May 30, 2007 10:36 am

RE: MEH Signs A Definitive Agreement With.....

Fri Aug 17, 2007 10:24 pm

Quoting Notdownnlocked (Reply 1):
Shall we take bets on how many minutes will pass until FL again changes their minds and makes another offer?

No. It's officially over now so long as the shareholders ratify the deal and the government approves it.
 
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mariner
Posts: 18415
Joined: Fri Nov 23, 2001 7:29 am

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 4:45 am

Quoting N917me (Thread starter):
The fat lady is singing!!!!!!

But is it the end of the opera?

There is an interesting comment in the WSJ today. TPG says that NWA is able to buy Midwest from them, under the terms of their deal.

The article is subscription only:

http://online.wsj.com/article/SB1187...8200798.html?mod=hpp_us_whats_news

"Private-equity firm TPG Capital said its proposed $450 million acquisition of Midwest Air Group Inc. leaves open the possibility of an eventual sale of the small airline to Northwest Airlines Corp."

I had not seen this stated before, and for the sake of fairness, TPG also has other ways of divesting Midwest, such as selling to the public.

mariner
aeternum nauta
 
airtran737
Posts: 3235
Joined: Mon Apr 05, 2004 3:47 am

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 4:59 am

I hope for the best for all the employees at YX, but if you think that this deal has secured your future then you are wrong. The red tailed shark that lives in MSP will eventually have its way with you and your company. Good luck to you all.
Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
 
daus
Posts: 232
Joined: Wed May 04, 2005 5:37 am

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 5:18 am

Audio: Midwest conference call about TPG/Northwest acquisition

http://www.jsonline.com/story/index.aspx?id=648583

Some notes:

3% Breakup Fee

No NWA Rep on new Board. TPG reps plus outsiders (from MKE and MCI)

No Veto (Golden) share for NWA. As mentioned above, TPG mentions NWA buying the whole thing. There appears to be a window where NWA controls the ability for TPG to sell Midwest to someone else. NWA first option to buy?

Tim still claiming not to know NWA's ownership %. It may not need to be disclosed given that the size of the investment may not be seen as "material" for NWA. NWA approached TPG in July.

Tim thinks the DOJ will review this as if it is a full merger between YX and NWA. Less overlap than with AirTran.
 
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Tugger
Posts: 6147
Joined: Tue Apr 18, 2006 8:38 am

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 5:25 am

Quoting Mariner (Reply 5):
There is an interesting comment in the WSJ today. TPG says that NWA is able to buy Midwest from them, under the terms of their deal.

The article is subscription only:

http://online.wsj.com/article/SB1187...8200798.html?mod=hpp_us_whats_news

"Private-equity firm TPG Capital said its proposed $450 million acquisition of Midwest Air Group Inc. leaves open the possibility of an eventual sale of the small airline to Northwest Airlines Corp."

I had not seen this stated before, and for the sake of fairness, TPG also has other ways of divesting Midwest, such as selling to the public.

So is this really a helluva good deal for NWA? Sounds like it. They get the management expertise of TPG and their funding and protect their market, and in the end the option/ability to acquire YX.

Not bad at all.

Tug
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 5:31 am

*turns the microphone to FL* Your response??

I would love to know what the folks at FL have to say about being beat out.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
CitrusCritter
Posts: 770
Joined: Wed May 30, 2007 10:36 am

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 5:31 am

Quoting Daus (Reply 7):
Less overlap than with AirTran.

True, but significantly more pricing power, and the public good is a consideration. Higher fares at MKE are not in the public interest. That is where the snag would come, if it does. I am not expecting this administration to block it however. Of course, I hope Herb Kohl looks like a hypocrite. He's been backing YX staying independent from the beginning...it'll be really funny if he has to defend his stance on the merger once fares go up.
 
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mariner
Posts: 18415
Joined: Fri Nov 23, 2001 7:29 am

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 5:32 am

Quoting Tugger (Reply 8):
So is this really a helluva good deal for NWA?

Mostly, I've stayed out of this debate, but I raised my eyebrows when I first heard NWA was involved (and it was NWA who approached TPG).

I'm not usually cynical, but I find it tough to think of NWA as some benevolent white knight, with Midwest's best interests at heart.

Nothing against NWA - they will always act in their own best interests, as they should.

NWA buying all of Midwest isn't a done deal, of course, but things might have turned out differently - or attitudes might have been different - if this statement had been made a couple of days ago.

mariner
aeternum nauta
 
User avatar
Tugger
Posts: 6147
Joined: Tue Apr 18, 2006 8:38 am

RE: MEH Signs A Definitive Agreement With.....

Sat Aug 18, 2007 5:44 am

Quoting AirframeAS (Reply 9):
would love to know what the folks at FL have to say about being beat out.

Probably something like "Dude, you just paid $17.00 for a $10.00 company! Good Luck!" (Tongue firmly in cheek. Flame on!)

As a business decision it was wise for FL to not overpay for YX while at the same time forcing a competitor to pay more.

So far as I can tell it was a good move all round. FL made good strategic moves, TPG/NW got what they wanted (for a bit
more than they wanted), NW secures their market and can better plan on a potential competitors moves and TPG should be able to squeeze out the required ROI from a good airline like Midwest (likely make them a stronger airline in the process),YX boosters seem very happy, YX investors get a good premium payment for their investment, and Midwest's management gets a helluva payday to look forward to along with not necessarily losing their jobs.

Looks like everyone wins.

Tug

[Edited 2007-08-17 22:44:42]
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner

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