Republic Airways To Buy Midwest Airlines
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Republic Airways said Tuesday it would buy Midwest Airlines from private equity group TPG Capital for USD$6 million in cash and a USD$25 million note.
In addition to getting all of Midwest's equity, Republic will receive TPG's USD$31 million secured note.
After the completion of the deal, TPG may convert its USD$25 million five-year note to RJET stock at USD$10 per share. TPG also will have the right to nominate a member to Republic's board of directors.
The deal comes a day after Republic said it would buy bankrupt US regional carrier Frontier Airlines for USD$108.75 million.
"This acquisition will enhance the strategic positioning of Republic Airways," Republic chief executive Bryan Bedford said of the Midwest purchase.
Under the agreement, Midwest will become a unit of Republic, flying under its own name. Midwest's Boeing 717s will be replaced with Embraer 190 aircraft, Republic said in a statement.
Wisconsin-based Midwest was bought by TPG in 2008 after rejecting a bid from rival AirTran. Midwest flies to destinations throughout the United States.
Republic, which is based in Indiana, owns Chautauqua Airlines, Republic Airlines and Shuttle America.
