Midwest To Talk Merger With AirTran, Others
Midwest Airlines' board of directors today said it has formed a committee to "explore strategic and financial alternatives," including talks with takeover hopeful AirTran Airways and other undisclosed "financial parties that have recently expressed interest in pursuing a transaction with Midwest."
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The board said it has not changed its recommendation to forego a merger with AirTran in favor of its go-it-alone plan, but the newly established committee said it would make a recommendation to the board after exploring alternatives. "There is no assurance that this process will result in a transaction with AirTran or any other party," Midwest said today in a statement.
Since AirTran began pursuing its hostile takeover bid late last year, a reluctant Midwest has been confronted with extended deadlines as well as pressure from some shareholders. Midwest last month said it would allow AirTran's parent company to present its $389 million merger proposal, following preliminary results that showed the election of three AirTran-nominated candidates to Midwest's board, which Midwest management had opposed. One of AirTran's confirmed nominees is on Midwest's five-person exploratory committee.
AirTran chairman and CEO Joe Leonard in a statement today said, "We are pleased that Midwest has taken the step to form a special committee, and we look forward to working with the committee."
Samuel Skinner, head of Midwest's committee and a former Secretary of the U.S. Department of Transportation, in a statement said, "On April 12, the board recommended that shareholders reject the most recent AirTran offer. At that time, the board concluded that Midwest's strategic plan provides more attractive long-term value-creation opportunities for shareholders," he explained. "By providing AirTran and other interested parties with access to our confidential information and holding discussions with them, the board is pursuing a process to evaluate whether greater value can be delivered to shareholders through a near-term transaction."
Midwest would not give a timeframe for discussions, saying it "cannot commit to when it will comment further."