AirTran Ups Offer for Midwest

On Monday, an acquisition of Midwest Air by TPG Capital seemed imminent, but now AirTran Holdings, a long-time pursuer of a merger with Midwest, has once again entered the fray with an increased offer. AirTran has increased its offer for Midwest to $16.25 per share, including $10 per share in cash and 0.6056 of a share of AirTran common stock. On Monday, Midwest's board of directors had endorsed a sale of $16 per share to private equity firm TPG and Northwest Airlines, which on Monday joined TPG in pursuing the outstanding shares of Midwest Air, calling itself a "passive investor" in the acquisition. NWA said it would provide financing for the acquisition, but would not participate in the management or control of Midwest, should the acquisition go through. "Midwest's shareholders are concerned 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," Joe Leonard, Airtran's chairman and CEO, said in a statement.

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