AirTran has finally given up its ongoing hostile takeover bid of Midwest Airlines after the airline's board announced it will accept a bid from private-equity firm TPG, with "passive investment" from Northwest. TPG is offering $16 per share, a total estimated cash offer exceeding $400 million, compared to AirTran's cash-and-stock offer of $389 million or $15.75 a share.
Midwest and TPG are expected to sign a merger agreement as early as Wednesday. TPG has a long history of investing in the airline industry, with recent deals in Spain and Australia, reports the Wall Street Journal.
Northwest is invested in TPG's offer, but the carrier has said it will not meddle in the future operations of Midwest. The airlines will continue their code-share agreement and could also participate in joint fuel purchasing, reports Reuters.
This development may come as a surprise to many people following the AirTran/Midwest saga. AirTran's pursuit of Midwest has been relentless so far this year, and many had assumed that the two would eventually merge. Fans of Midwest will likely be relieved that the airlines will not go the way of US Airways and America West, whose merger has proved rocky for employees and travelers both.