By David Wise
Midwest Airlines CEO Tim Hoeksema said today he expects TPG Capital’s buyout of the company to raise no anti-trust concerns and be closed by the end of the year.
Before a group of Milwaukee Rotarians today, Hoeksema described the nine-month battle to defend Midwest from a takeover by AirTran Airways as intense, straining, expensive and at times, “hostile with a capital ‘H.’”
“In many ways, the saga of the last nine months was about preserving our culture and our values,” Hoeksema said.
He described the support the airline received from the community as “absolutely overwhelming and amazing.”
While it was ultimately the offer from TPG, in which Northwest Airlines is a silent partner, that saved Midwest from an AirTran takeover, Hoeksema said he had “serious talks” with six different airlines and four different private equity firms during the course of the takeover bid.
“Despite what you might read, I didn’t suddenly a few weeks ago call one airline to kind of save my job or the jobs of management,” Hoeksema said. “We truly were working very hard over the last many months to do the best for all the people that were counting on Midwest Airlines.”
Hoeksema said AirTran’s offer, which included a mix of cash and stocks, didn’t have guaranteed financing and that the airline’s expansion plans weren’t sustainable.
The agreement with TPG and Northwest, Hoeksema said, is expected to generate annual savings of $2 million on insurance, $5 million on fuel and up to $1.5 million on costs it would have had to incur by being a public company.
Hoeksema said TPG will likely hold Midwest for three to seven years before selling it. As for whether the ultimate buyer will be Northwest, Hoeksema said he “wouldn’t bet a dollar either way.”
Hoeksema received a standing ovation at the end of his address.
Listen to audio of Hoeksema’s speech: