WisBusiness: Morningstar analyst says Midwest should take AirTran offer

By Patrick Fitzgerald
WisBusiness.com

The Midwest board is meeting this afternoon to consider AirTran’s latest offer of $16.25 per share. Brian Nelson of Morningstar Inc. says the board should take it.

“If I had to handicap it, I would have to say there is a greater than 50 percent chance they’ll go with the AirTran offer,” said Nelson. “But that’s not to say they could go with the all-cash offer of $16 a share from TPG Capital.”

Nelson said AirTran’s reworked offer should make sense to Midwest shareholders. He said they would benefit more from “synergies and opportunities inherent within AirTran’s proposed deal.”

Depsite that, he said the price of AirTran’s bid to acquire Midwest is getting steep.

“For AirTran, things are getting really pricey to justify this deal,” said Nelson. “AirTran has the network and cost synergies to make the deal possible, and TPG doesn’t have those.”

“Essentially, $16.25 seems like a better deal.”