Pequot's Midwest stake takes off on hostile bid

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By Pete Gallo

Regional airline stock prices have remained pretty low to the ground in 2007 as a tailwind of much anticipated consolidation has yet to make its way onto Wall Street radar screens.

However, that hasn't stopped Art Samberg's investment team at Pequot Capital Management from buying a first-class ticket to play a possible merger between regional carrier Midwest Air Group and its repeatedly scorned suitor, Orlando, Fla.-based AirTran Holdings.

Since the start of the year, Pequot has purchased 1.5 million shares of Midwest Airlines, giving the hedge fund a 6% stake in the airline and making Samberg's shop