AirTran: Majority Of Midwest Shareholders Agree To Tender

AirTran Airways today said shareholders representing a 56.6 percent stake in the 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.

However, Midwest Airlines management and board today held firm to their anti-merger stance, as it has for months amid upped bids, extended deadlines and AirTran's prodding. "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," she pointed out. "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."

Meanwhile, Midwest and Northwest Airlines today agreed to begin a codeshare partnership this summer, "subject to a final agreement," the carriers said. The carriers said the agreement "will augment the frequent flyer partnership Northwest and Midwest launched in May 2006."