AirTran Airways last week said shareholders representing a 56.6 percent stake in Midwest Airlines agreed to tender more than 13.9 million shares to AirTran's acquisition holding company. AirTran said it is extending its latest tender offer of $15 per share until June 8. "We view the significant level of tenders to date as a ringing endorsement of the business plan we have put together," AirTran CEO Joe Leonard said. Midwest's management and board last week held firm to their anti-merger stance. "Nothing has changed as far as control of Midwest Air Group is concerned; no shares have been purchased by AirTran," said Midwest senior vice president and general counsel and secretary Carol Skornicka. "The exchange offer is subject to numerous conditions. Regardless of the number of shares tendered, AirTran would not purchase shares unless those conditions are waived or are satisfied." Richard Hurowitz, CEO of Octavian—a Midwest shareholder and vocal supporter of the acquisition—said the tender is "a clear indication of the desire of Midwest's owners for the board of directors to immediately engage in productive and good-faith negotiations to effectuate a transaction." Noting laws that protect Wisconsin corporations from hostile takeovers, Skornicka said, "The board has declined to take action to satisfy any of the conditions. While other scenarios are theoretically possible, as a practical matter, board approval would be required for AirTran to accomplish its goal of acquiring our company."
DOT Judge Sides With Airlines On LAX RentA U.S. Department of Transportation administrative law judge last week sided with airlines in a rent dispute at Los Angeles International Airport, recommending Transportation Secretary Mary Peters by June 15 endorse his finding that rent increases at LAX are "unreasonable" and be refunded to carriers. Several carriers, including American, Delta, Northwest, United and US Airways, used the increase as justification to levy $10 departure fees for LAX flights
(BTN, April 23).Travelport's Clarke: Worldspan buy On TrackTravelport CEO Jeff Clarke last week during the company's first-quarter earnings call said he still expects the company's acquisition of global distribution system Worldspan to close in the third quarter of this year, despite a second-phase review of the proposed transaction by the European Commission. "We still believe this is a very pro-competitive acquisition," Clarke said. "This is one where the industry will be stronger. The competitive context in the industry will be improved by this. We will have stronger technology and be a better competitor to a player as dominant as Amadeus in this market." The European Commission opened a detailed review of Travelport's acquisition of Worldspan under European Union merger regulations, noting that "the proposed transaction would give rise to competition concerns on the market for the provision of GDS services to travel service providers—airlines, car rental companies, hotels, etc.—in the European Economic Area and to travel agents in several member states." The commission said it would make its final decision on the proposed merger by Sept. 13.
Hotel Brands To Add Asian Midprice PropertiesBoth Accor and Hilton Hotels Corp. have announced plans to add several midprice hotel properties in China and India. Hilton recently announced an agreement with its joint venture company DLF to develop 10 new hotels in India in the coming years, including five select-service Hilton Garden Inn properties. "We are moving quickly toward realizing our goal of becoming a household name in India in the next five years," said Ian Carter, executive vice president and CEO of Hilton's international operations. Accor this month said it would launch 20 hotels in China this year, with another 40 under construction or in the final planning phases. The properties are spread evenly between Accor's upscale and lower-tiered brands. Quite a bit of the activity centers around Accor's economy Ibis brand, which Accor Asia Pacific managing director Michael Issenberg said would primarily target business travelers with locations in industrial areas.