Carrier Issues One More Last Chance
In yet another attempt to take over Midwest Air Group, AirTran
Airways said Monday it had extended the deadline for Midwest
shareholders to accept its $15-per-share offer from June 8 to
August 10.
As of Friday, AirTran claims Midwest shareholders agreed to
tender more than 59 percent of outstanding shares, according to
Business Travel News.
"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 AirTran chairman and CEO Joe Leonard. "Based on the support we
have heard from Midwest shareholders and other observers, they want
a new set of eyes and a fresh, independent voice inside the Midwest
boardroom so that the AirTran offer can get a full and fair
hearing."
Midwest has been fending off takeover threats from AirTran for
quite some time, starting with the Atlanta-based carrier's initial
offer of $78 million in 2005. That offer has grown considerably, to
the current bid of $389 million.
AirTran added to the pressure with last week's announcement of
the recommendations of two shareholder advisory firms, in an effort
to garner support for its hostile takeover attempt. As reported by Aero-News, the
firms made a recommendation that Midwest shareholders replace a few
members of their board of directors with a slate nominated by
AirTran... just days before Midwest is to hold its shareholder
meeting on June 14 in Milwaukee.
"Regardless of the results, the company's board of directors
continues to believe there is greater value for shareholders in the
company's long-term strategic plan than in the offer proposed by
AirTran," Midwest's management said Monday, according to The
Associated Press -- remarks Leonard quickly dismissed.
"We are dismayed that the Midwest board continues to ignore
shareholders' calls for the company to explore the merits of the
AirTran offer and in their recent communication regarding the
election of directors made it clear that the incumbent board is
"convinced" that their standalone plan is the only route they will
pursue and that shareholders should use their proxy vote to show
their support for the board and the standalone plan," Leonard
said.
"That is why we urge the Midwest shareholders to vote for the
election of John Albertine, Jeffrey Erickson and Charles Kalmbach
at the Midwest Annual Shareholders Meeting," Leonard added. "Doing
so will send a strong message to Midwest's current Board and
management that the owners of the company are not satisfied with
Midwest's stand-alone plan, which has no clear path to
implementation, no near-term reward and questionable financial
projections. It is past time for changing the dynamics inside the
Midwest boardroom."
Midwest chairman and CEO Timothy Hoeksema says the carrier's
MD-80 purchases, new and expanded codeshares and its developing
50-seat regional program point to coming revenue increases. The
company expects these initiatives to be the building blocks for
strong earnings and a profitable future.
"Despite the fact that the industry is currently experiencing
increasing pressure on yields, which we are addressing through
pricing and yield management, we believe Midwest is well positioned
to continue to grow and thrive," Hoeksema observed. "Smart
companies and the ones that survive are those that offer a
differentiated product that translates into market preference, and
those that have developed diversified and sustainable revenue
sources -- which these initiatives are projected to provide."