TPG last August agreed to pay $17 per share for Oak Creek, Wis.-based Midwest, rescuing the small airline from the hostile overtures of rival AirTran Holdings Inc. Long-time Midwest rival Northwest, based in Eagan, Minn., is providing more than 45% of the capital for the deal in an effort to keep discounter AirTran from establishing a bulkhead in its backyard. Northwest has insisted its investment is passive, but regulators requested more time to decide for themselves. The companies agreed to put off closing the transaction until the end of January to give the Justice Department more time to investigate.
With that deadline fast approaching, Northwest CEO Douglas Steenland during an investor conference call Tuesday said he expects the companies to close the deal on time and with regulatory approval. Airline deals, he said, are always subject to extra scrutiny, "but it is our expectation that the deal will not be opposed."
AirTran officials have suggested that given the spike in fuel prices since last summer, Northwest and TPG might now be experiencing some buyer's remorse. The discounter has not made life easy on Midwest, announcing in recent weeks rival service from Midwest's Milwaukee hub to business destinations including Washington, San Diego, San Francisco, Los Angeles and Boston. But Steenland said his company is still happy to be involved.
"It was the right decision then, and the right decision today," the executive said. "If you look at things over the longer term, we are pleased" with the transaction. - Lou Whiteman
See TheDeal.com story on TPG and Northwest's deal for Midwest
Listen to a replay of Northwest's conference call
See Dealscape post updating the Midwest merger review
