Midwest Insists It Is Not Entering Into Negotiations
Midwest Air Group, the parent company of Midwest Airlines, has
been fending off takeover advances by AirTran Holdings, Inc. for
awhile now.
The carrier has long contended it is more profitable as a solo
act... but its shareholders may be waivering. As ANN reported, its
shareholders, much to Midwest's chagrin, voted to allow three of
AirTran's people to hold Midwest board seats.
Now that they're in the boardroom, the low-fare carrier will
pitch its case again Monday, according to the Houston Chronicle.
AirTran Chairman and Chief Executive Officer Joe Leonard, along
with other executives, will make a presentation and then open the
floor to questions over a three-hour period, he said, hoping to
dispel such rumors as massive job cuts at Midwest's Milwaukee
headquarters.
The latest offer is worth $389 million in cash and stocks, and
Leonard wants the board to set aside feelings and listen
objectively.
"I think the board has got to get over it and I think they will
get over the emotion and look at this from a business standpoint,"
he said.
Shareholders like Richard Hurowitz, chief executive officer of
Octavian Advisors LP, Midwest's largest shareholder, have wanted
this kind of meeting to happen. He hopes it will prove pivotal in
advancing the deal.
"We're happy to see that they're actually sitting down, though
we think they should do more than just listen. They should be
engaging in negotiations at this point," he said. His hedge fund
owns 6.6 percent of Midwest shares.
Carol Skornicka, spokesperson for Midwest, insists Monday's
meeting is not one of entering into any kind of negotiations. She
said the company merely realized shareholders want them to consider
the deal.
"We felt the results of the proxy contest and the election of
new directors signaled the shareholders would like us to at least
listen to AirTran and that's what we intend to do," she said.
Sixty-five percent of votes cast at Midwest's June 14
shareholders meeting went to AirTran's slate for the board of
directors. Midwest Chairman and Chief Executive Officer Timothy
Hoeksema announced the board decided to allow AirTran to make a
presentation even before results were announced, as ANN reported.
Reportedly, more than half Of Midwest's shareholders have said
they will tender their shares at the current offer of $15 per
share, according to the Chronicle.
Leonard said AirTran won't raise the offer, and the issue now
rests with the board.
"The shareholders have decided that's a fair price so the board
doesn't have to consider what's a fair price," he said.
The latest offer expires August 10.
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