AirTran Holdings, Inc., Presents New Offer For Midwest
Aug 14, 2007, 5:01 pm
#46
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As I understand it from a quick read of the Pequot letter, they argue that the BOD did not properly account for the future value of the Air Tran stock. In particular that after the successful conclusion of a deal, that the market would reward AAI stock with a "pop" in value.
Aug 14, 2007, 5:06 pm
#47
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According to http://www.jsonline.com/story/index.aspx?id=646916, AirTran only renewed the offer after shareholders requested it. Take that for what it's worth.
Aug 14, 2007, 5:15 pm
#48
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Pequot owns 8.8% of Midwest shares so they have a significant ownership in the company. Today's market was punishing the value of MEH stock. Apparently the market was having its doubts about the TPG deal going through.
Aug 14, 2007, 6:18 pm
#49
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No matter how Pequot wants to spin it, cash is more attractive than cash + stock in this market. With the present volatility in the broader market, the DJIA is off some 7% since July 19th for example, and the credit markets have all but gone dry except for the most qualified, cash is king. The BODs would be allowing a large amount of risk if they accepted the Airtran deal over the TPG/NW offer. Now, that risk COULD be very lucrative down the line, but that's not the present YX BOD's concern. They are to maximize the PRESENT sale value of their company, not what someone thinks it will be worth on "X" day in the future when rolled into another company.
All this being said, I see TPG and NW matching the $16.25 offer, which would add about $6,180,000 to what they offered on Sunday and the sale being completed tomorrow.
I see the only way Airtran wins this is if they bring ALL cash to the table. Then, it would get interesting. Man, gotta love the drama!
Last edited by JTMSP; Aug 14, 2007 at 6:36 pm Reason: Clarification
Aug 14, 2007, 6:39 pm
#50
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Aug 14, 2007, 7:37 pm
#51
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More info from a.net. I can't confirm the quotes myself, I don't know the poster's source.
"Pequot is Midwest Air's only institutional investor that has raised concerns about TPG Capital's bid, Carol Skornicka, senior vice president of corporate affairs said this morning.
"We've been hearing from other hedge funds who are saying, 'Congratulations, this is great,'" she said.
Skornicka said the issues raised by Pequot were considered by Midwest Air's board before it voted to pursue a sale agreement with TPG Capital. The board decided the TPG Capital's bid provided more certainty and value than AirTran's offer, citing the fact that it's all cash.
Skornicka also said antitrust concerns raised by Leonard are not expected to prevent a sale to TPG Capital from gaining approval from the U.S. Department of Justice, which routinely reviews airline mergers."
"Pequot is Midwest Air's only institutional investor that has raised concerns about TPG Capital's bid, Carol Skornicka, senior vice president of corporate affairs said this morning.
"We've been hearing from other hedge funds who are saying, 'Congratulations, this is great,'" she said.
Skornicka said the issues raised by Pequot were considered by Midwest Air's board before it voted to pursue a sale agreement with TPG Capital. The board decided the TPG Capital's bid provided more certainty and value than AirTran's offer, citing the fact that it's all cash.
Skornicka also said antitrust concerns raised by Leonard are not expected to prevent a sale to TPG Capital from gaining approval from the U.S. Department of Justice, which routinely reviews airline mergers."
Aug 14, 2007, 8:23 pm
#52
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More info from a.net. I can't confirm the quotes myself, I don't know the poster's source.
"Pequot is Midwest Air's only institutional investor that has raised concerns about TPG Capital's bid, Carol Skornicka, senior vice president of corporate affairs said this morning.
"We've been hearing from other hedge funds who are saying, 'Congratulations, this is great,'" she said.
Skornicka said the issues raised by Pequot were considered by Midwest Air's board before it voted to pursue a sale agreement with TPG Capital. The board decided the TPG Capital's bid provided more certainty and value than AirTran's offer, citing the fact that it's all cash.
Skornicka also said antitrust concerns raised by Leonard are not expected to prevent a sale to TPG Capital from gaining approval from the U.S. Department of Justice, which routinely reviews airline mergers."
"Pequot is Midwest Air's only institutional investor that has raised concerns about TPG Capital's bid, Carol Skornicka, senior vice president of corporate affairs said this morning.
"We've been hearing from other hedge funds who are saying, 'Congratulations, this is great,'" she said.
Skornicka said the issues raised by Pequot were considered by Midwest Air's board before it voted to pursue a sale agreement with TPG Capital. The board decided the TPG Capital's bid provided more certainty and value than AirTran's offer, citing the fact that it's all cash.
Skornicka also said antitrust concerns raised by Leonard are not expected to prevent a sale to TPG Capital from gaining approval from the U.S. Department of Justice, which routinely reviews airline mergers."
Aug 14, 2007, 8:23 pm
#53
Join Date: Jan 2007
Location: Bay Area, CA
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More info from a.net. I can't confirm the quotes myself, I don't know the poster's source.
"Pequot is Midwest Air's only institutional investor that has raised concerns about TPG Capital's bid, Carol Skornicka, senior vice president of corporate affairs said this morning.
"We've been hearing from other hedge funds who are saying, 'Congratulations, this is great,'" she said.
Skornicka said the issues raised by Pequot were considered by Midwest Air's board before it voted to pursue a sale agreement with TPG Capital. The board decided the TPG Capital's bid provided more certainty and value than AirTran's offer, citing the fact that it's all cash.
Skornicka also said antitrust concerns raised by Leonard are not expected to prevent a sale to TPG Capital from gaining approval from the U.S. Department of Justice, which routinely reviews airline mergers."
"Pequot is Midwest Air's only institutional investor that has raised concerns about TPG Capital's bid, Carol Skornicka, senior vice president of corporate affairs said this morning.
"We've been hearing from other hedge funds who are saying, 'Congratulations, this is great,'" she said.
Skornicka said the issues raised by Pequot were considered by Midwest Air's board before it voted to pursue a sale agreement with TPG Capital. The board decided the TPG Capital's bid provided more certainty and value than AirTran's offer, citing the fact that it's all cash.
Skornicka also said antitrust concerns raised by Leonard are not expected to prevent a sale to TPG Capital from gaining approval from the U.S. Department of Justice, which routinely reviews airline mergers."
Aug 14, 2007, 8:51 pm
#54
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I just got a news update from Yahoo titled "Midwest Set to Accept Bid". My first thought was AirTran won the bid... But it is just a story on the WSJ about the TPG bid. They don't even mention the increased offer from AirTran. Seems odd to me, they wouldn't update the story a bit before posting.
Aug 14, 2007, 9:27 pm
#55
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10 O'clock news here on the local NBC TV station has indicated AirTran maybe willing to even go higher if TPG and friends counter their offer. I was all ready to give this merger talk a rest and discuss new aircraft orders and new destinations from MKE. Eventhough the merger discussions have been heated here at times, it was still good to talk about it. At any rate, whichever way this ends up I will be eager to move on. Now I know why Carol wants to retire. 
Aug 15, 2007, 5:05 am
#57
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Yes, punished. With a tender offer out there at $16.00/share and for the market price to hover in the high 13s was idicative of disbelief in the deal.
Aug 15, 2007, 5:08 am
#59
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Aug 15, 2007, 5:19 am
#60
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I tend to agree with hazelrah's assessment. If the stock market loved this merger with TPG, MEH stock would have gone up these last two days. Watch MEH stock today. After hours trading has indicated MEH will go up significantly. Speculators like AirTran's offer better than TPG's. I suspect they believe there will be anti trust issues. You know AirTran is going to push the anti trust issue before the DoJ in the coming months. Also some investors are putting up a stink because they will have to pay taxes on short term capital gains with the TPG all cash offer. I have no sympathy for them, but these are large investors and they can influence shareholders to reject the TPG offer.
Last edited by flyYX; Aug 15, 2007 at 5:23 am Reason: added another comment