Midwest Air Group said it will pursue takeover offer worth roughly $395.5 million from U.S. private equity firm TPG Capital, which includes a passive investment from the U.S. No 5 airline Northwest Airlines.
The $16 per share all-cash offer tops the roughly $380 million offer low-cost carrier AirTran Airways had earlier offered for Midwest.
Midwest and TPG expect to sign a definitive merger agreement by August 15, Midwest said in a statement late on Sunday.
Northwest said in a separate statement that its investment, for an undisclosed amount, will facilitate the transaction but that it has no plans to participate in the management or control of Midwest if TPG is successful in its takeover bid.
AirTran said earlier on Sunday it was walking away from its hostile bid to acquire Midwest in light of the rival takeover offer. But it said that TPG's offer, given the passive investment from Northwest, could raise antitrust concerns, which could make it more difficult for the transaction to win regulatory approval.