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AirTran extends offer for Midwest Air
NEW YORK (Reuters) - AirTran Holdings Inc. (AAI.N) extended its takeover offer of $15 a share for Midwest Air Group MEH.A until August 10 and said on Monday it was dismayed that Midwest's board continued to oppose such a deal.
AirTran, parent of low-cost airline AirTran Airways, in April increased its hostile offer for Midwest to $15 per Midwest share from an original $11.25.
Midwest shares closed up 8 cents at $15.05 on Friday.
Midwest remained steadfast in its opposition to AirTran's bid and said it would continue to oppose the takeover regardless of the outcome of AirTran's tender offer.
"We believe the strategic initiatives, particularly those recently announced, will unlock value not reflected in the current share price or in the AirTran offer," Midwest Chief Executive Timothy Hoeksema said in a statement.
Midwest believes it can boost annual revenue by more than $200 million through measures such as a larger fleet and a new code-share agreement with Northwest Airlines Corp. NWA.N.
AirTran said in a statement on Monday that Midwest shareholders agreed to tender more than 14.6 million shares to AirTran unit Galena Acquisition Corp., representing 59.5 percent of Midwest shares.
"We are dismayed that the Midwest board continues to ignore shareholders' calls for the company to explore the merits of the AirTran offer," Joe Leonard, AirTran chairman and chief executive, said in the statement.
AirTran also urged shareholders to vote for a slate of nominees it has proposed for Midwest's board at the latter's shareholder meeting scheduled for June 14.
Midwest believes it can still thwart a takeover, because it said the acquisition of the shares by AirTran would require approval by Midwest's board. Also, even if AirTran succeeds in getting its three nominees elected, it would not control the nine-member body.
AirTran previously nominated Jeffrey Erickson, Charles Kalmbach and John Albertine to Midwest's board.
Erickson recently retired as chief executive of Atlas Air Worldwide Holdings Inc. (AAWW.O) and remains a member of its board. Kalmbach was recently chief executive of human resource firm DBM Inc., while Albertine is chairman and chief executive of consulting and merchant banking firm Albertine Enterprises.
Midwest's shareholders meeting is scheduled for June 14.
AirTran shares closed Friday at $11.88, up 2 percent.
(Additional reporting by Chris Reiter)
