A few weeks ago we learned that AirTran will be presenting its case to buyout Midwest Airlines to the company's board of directors. However, today, Midwest Air Group announced negotiations with the Atlanta-based AirTran Holdings broke down.

"The board concluded that the TPG offer presented greater value and certainty for Midwest shareholders than the AirTran offer," Midwest said in a statement.

AirTran had offered $15.75 a share, a price that spokesman Tad Hutcheson said made the equity value of the transaction in excess of $431 million based on Friday's closing price of AirTran stock.

The initial value of AirTran's offer was placed at $389 million based on its stock price at the time.

Midwest and TPG expect to finalize a merger agreement no later than Wednesday, the Midwest statement said.

TPG, formerly Texas Pacific Group, is a private equity investor based in Fort Worth. Partner Richard P. Schifter said TPG plans to finance the transaction through contributions from TPG Partners V, L.P., a fund TPG manages with $15.3 billion of committed equity capital, as well as from one or more partners.

"We believe that our experience in this sector, together with our track record for maintaining stable, long-term investments, argue strongly in favor of an acquisition by TPG," Schifter said in a letter to Midwest's board of directors that was dated Sunday and was reproduced in the Midwest statement.

David Hirschman, another AirTran spokesman, said the Orlando, Florida-based parent company of AirTran Airways will return to its strategy of growing as a standalone business.

"We've said all along that this (deal) is something we'd like to do, not something we need to do," he said. "We've got great growth prospects independently and that's what we're going to focus on."

Source