No track record
Also, AirTran has never handled a big merger. In fact, this would have been the first big acquisition, hostile or not, orchestrated by a major discount carrier in the United States.
But AirTran argued that the proposed merger was ideal because the two carriers' route networks had little overlap, and both fly Boeing 717s, a smaller mainline jet that few other airlines use.
Baker, however, suggested that it is better for AirTran to "keep its powder dry" in case better opportunities crop up, perhaps from later consolidation in the industry. He said that could open up chances for AirTran to expand at Chicago's O'Hare or New York's LaGuardia airports --- both destinations favored by lucrative business travelers.
AirTran was wise to walk away rather than get locked in a bidding war, said Kevin Crissey, with UBS Securities. "This was appropriate in our view because it has become increasingly apparent that Northwest would aggressively defend Milwaukee," Crissey said in a report.
Crissey predicted that AirTran's expansion in the market would have ignited a battle with Northwest that "would likely have destroyed the revenue synergies AirTran was hoping to capture."
GUNNING FOR MIDWEST
* AirTran CEO Joe Leonard meets with Midwest CEO Tim Hoeksema and offers to buy the Milwaukee-based carrier.
DEC. 7, 2006
* Midwest's board formally rejects the AirTran offer.
DEC. 13, 2006
* AirTran publicly launches a hostile bid for Midwest at $11.25 a share, or $288 million, a 24 percent premium at the time. Midwest later rejects the offer as "inadequate and opportunistic."
JAN. 11, 2007
* AirTran raises its offer to $13.25 a share, or $345 million. Midwest rejects the sweetened bid.
* AirTran boosts its offer to $15 a share, or $389 million, and says it won't raise it again, setting an Aug. 10 deadline.
* AirTran gains the support of 57 percent of Midwest shareholders, but Midwest retains the right to use Wisconsin anti-takeover laws to block a transaction.
* A majority of Midwest's shareholders elect three AirTran-backed directors to Midwest's nine-member board, opening cracks in the airline's resistance to a deal.
* AirTran's top brass presents its merger case to Midwest's new board, which doesn't take any immediate action.
* Midwest's board begins talks with AirTran and three unidentified potential bidders.
* As AirTran's deadline looms, Northwest Airlines is reported to be a partner in an investor group that wants to buy Midwest and keep it independent.
* AirTran boosts its offer to $15.75 a share, but pulls the plug later that day. Midwest announces a tentative deal with TPG Capital, a private equity firm that has invested in Continental and other airlines. Northwest confirms it will be a "passive" investor in Midwest.
--- Staff research
New offer made for Midwest
Hostile offer raised to $445 million.
Both the U.S. Department of Justice and fans of Midwest Airlines agree that a proposal to sell the carrier is worth a long look, although for different reasons. Earlier this month, agency...
The size of Northwest's stake was among the details released in the proxy statement filed Thursday by Midwest delineating its deal to be bought by TPG Capital for $17 a share.