AirTran extends offer for Midwest Air

By Megan Davies

NEW YORK (Reuters) - AirTran Holdings Inc. (AAI.N: Quote, Profile, Research, Stock Buzz) 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: Quote, Profile, Research, Stock Buzz).

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.