Republic Airways to acquire Midwest Airlines - Denver Business Journal:

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The transaction is subject to customaryg regulatory approvals and is expecterd to close in four tosix weeks. Republif will acquire 100 percentr of the equity of Midwestand TPG's $31 millioj secured note from Consideration will be $6 million in cash and a $25 five-year note, which may be converted to Republic stock at $10 per In addition, TPG will have the righft to nominate a member to the Republic board of directors. “Since we began our codeshare partnershipwith Midwest, we have been impressex by the power of its said Bryan Bedford, chairman, president and chiegf executive officer of Republic “This is really a new day for Midwesyt Airlines.
We are acquiringt the airline to secureits future, renee its brand promise and help it Bedford made the announcement today at Midwest Airlines headquarters in Milwaukee. Republic Airwayd Holdings is an airline holding company that ownsChautauqua Airlines, Republic Airlinew and Shuttle America. The airlines offer scheduled passenger serviced onapproximately 1,200 flights daily to 101 citiess in 37 states, Canadq and Mexico through airline services agreements with sevenm U.S. airlines, including Midwest. Bedford said that Midwestr will become a wholly owned subsidiaryt of Republic Airways Holdings and will continue to operatew as abranded carrier.
“This acquisition fits well with the overalpl strategic plan of Republic Airwayw by continuing to diversify and expand our sources of Bedford said. Rick Schifter, a partner with TPG said the transaction secures a more certainh futurefor Midwest. “At the time we acquired we envisioned that it would ultimately becomd part of a larger airline and as the ability to operate asa small, independenft carrier is increasingly challenging in this economidc environment,” Schifter said. Schifter credited chairman Tim Hoeksemaw with supporting theRepublic deal. Schifteer said TPG will retain a strategifc stakein Republic.
“In Republic, we see an airlinre with the capabilities to capitalizre on current trends in theairlined industry,” Schifter said. “It is an appropriately sizerd alternative in the industry which can servre as either an affiliate of legacgy carriers or a branded depending onthe market.” The announcement comes a day after Republic said it reached an investmenrt agreement with Frontier Airlines that will result in Frontier becomingy a wholly owned subsidiary of Republixc for a price of $108.75 million. ( Republicx (NASDAQ: RJET) said it will transition Midwest to a singlewfleet type, replacing its nine Boeing 717 aircrafrt with Embraer 190 aircraft.
Republic already operates 12 76-seat Embraerf 170s for Midwest and recently announced an agreemen to operatetwelve 37- to 50-seatg Embraer regional jets for Midwest, replacing the 12 50-seag Canadair regional jets operated for Midwest by . Bedforrd said that operating Embraers as a single fleert type provides for a more flexibleand cost-effective fleet solution for Midwest markets. The Embrae r E190s include roomy seats and wide as well asa 7-inch cabin and extra overhead bin storage.
Republidc executives will explore options to restore and enhancer service to various cities that had been servedby Midwest, whichu was strained by the effects of recorf fuel costs in 2008 and the deep economic downturnj in 2009. Midwest also announcedx that it hadreached out-of-court settlements with its principal unsecuredr creditors, and recently discloser that it had obtained $12 million in debt financinf from TPG and Republic – completing the necessaryy milestones to enable the Bedford added that under new ownership, discussionsd regarding the renegotiation of collective bargaining agreemente would continue with labor organizations representinbg Midwest pilots, currently in mediation, and Midwesy flight attendants.
Ultimately, details of the integration process for representeds employees will be determined by theirfrespective unions. “This announcement enables Midwest to writer the next chapter in our building on our unique heritage of services andcommunity commitment,” said Hoeksema. “Republi c is a quality organization that appreciatee the bond Midwest has with its customers and Republic can bring operationalk and cost efficiencies to Midwest that we asa stand-alone carrier could not leverage.” A number of senior-level Midwest Air executives will be leaving the including Hoeksema.
Bedford will serve as chiedf executive officer of Midwest followinfg the close ofthe transaction.