AirTran Extends Tender Offer for Midwest Air
Published on: June 12, 2007
AirTran Holdings, Inc. is extending its latest tender offer of $15 per share of Midwest Air Group, until midnight Aug. 10. As of the close of business on June 8, 2007, shareholders had agreed to tender more than 14.6 million shares of Midwest to Galena Acquisition Corp., a wholly owned subsidiary of AirTran, which represents 59.5 percent of all outstanding shares of Midwest Air Group, or 64.1 percent of outstanding shares that are not held by the Midwest board or management. “We are gratified by the response we are receiving from Midwest’s shareholders regarding both the tender offer and the slate of directors that we have nominated for the Midwest Board,” said Joe Leonard, AirTran Airways’ chairman and chief executive officer.
But Midwest’s management, which can block the takeover, continues to resist its unwanted suitor. Its board of directors said it continues to believe there is greater value for shareholders in the company’s long-term strategic plan than in the offer proposed by AirTran, according to Timothy Hoeksema, chairman of the board and CEO. “It is all about value,” said Hoeksema. “We believe the strategic initiatives, particularly those recently announced, will unlock value not reflected in the current share price or in the AirTran offer.” Coupled with Midwest’s product, service offering and loyal customer base, he predicted these initiatives will allow shareholders to benefit as the plan is executed.
Regarding the tender offer results, Midwest reiterated remarks previously issued, noting that the results do not have any material effect on Midwest in that no shares of Midwest have actually been purchased by AirTran as a result of the tender. Wisconsin law allows Midwest to use a poison-pill defense to stop the takeover. AirTran said it hopes that Midwest shareholders will elect new members to the board later this week who can push other members of the board to reconsider its decision. Midwest, which is distinguished by its high levels of service, has successfully rallied employees and customers to lobby against the takeover.