Wed, Aug 01, 2007
Board Will Meet With All Parties Interested In Buyout
It appears persistence may soon pay off for AirTran Airways, as
months of dogged pursuit of a merger appear to have finally worn
down the board at Midwest Air Group, owner of Midwest Airlines.
Midwest indicated Tuesday it will consider AirTran's latest $389
million offer, and will soon form a committee of its board of
directors to begin talks with AirTran, reports the Associated
Press. That marks a 180-degree shift from the board's previous
position the airline would function best as a separate entity.
Representatives with Midwest stressed those talks do not mean a
buyout is imminent... but just try telling that to Wall Street.
Shares in the regional airline took off Tuesday, climbing 11
percent on the news of a possible merger.
Curiously, the board also announced Midwest would open talks
with other companies that have expressed interest in buying the
airline... sending a signal to AirTran that it isn't the only
bidder in the game.
The news was welcomed by Octavian Advisors, the largest single
shareholder in Midwest, which has voiced its support for an
AirTran/Midwest merger for some time.
"We think this is a big step forward for effectuating a
transaction," said Richard Hurowitz, chief executive of the hedge
As you would expect, AirTran CEO Joe Leonard also expressed
optimism. "We look forward to working with them," he said.
Analyst Craig Kennison, with Robert W. Baird & Co., said the
about-face by Midwest is a "clear signal the board has changed its
view on the value of Midwest as an independent airline and sees
more opportunity for shareholders and other constituents in a
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