Facts and Shareholders Don't Matter at Midwest
Friday April 13, 11:23 am ET
AirTran Calls Midwest's Rejection of Recent Offer Irresponsible
and Company's Growth Plan Delusional
ORLANDO, Fla., April 13 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc. (NYSE:
AAI -
News), the parent company of AirTran Airways, today responded to Midwest's rejection of AirTran's enhanced offer and reiterated its commitment to its exchange offer for Midwest Air Group, Inc. (Amex:
MEH -
News), initially launched on January 11, 2007.
Leonard, AirTran's chairman and chief executive officer stated, "We are disappointed, but unfortunately not surprised, that the Board of Midwest rejected our materially enhanced offer of $15 per share. This kind of behavior flies in the face of good corporate governance and is clearly irresponsible, demonstrating that the Board is derelict in its fiduciary duty to the Midwest shareholders."
As of yesterday's closing price of AirTran's stock, the airline's current offer is worth $15.75 per Midwest share, a substantial premium to the $8.13 the stock was trading at just prior to the public announcement of AirTran's offer.
"We have a difficult time believing their refusal to enter in discussions with us is based on price," said Leonard. "What is even more incredible is that the Board's rejection came after Midwest's management announced the company will miss, by a substantial amount, its 2007 earnings projection put forth only a few short weeks ago. Midwest is just over 100 days into the year, and already lowering its earnings guidance. How can any truly independent Midwest director vote for management's 'standalone, go-it-alone' plan that is already flawed and pass up, without even bothering to discuss with us, the value and certainty the AirTran offer provides?"
"We had hoped that the Board would demonstrate its fiduciary duty by entering into discussions with AirTran to learn more about our offer, which provides shareholders greater value, employees more jobs and career opportunities, passengers increased service at low fares, and the Milwaukee community a stronger hub with greater economic opportunities. Instead the Board of Midwest has chosen to support management's "Just Say No" policy, favoring the entrenchment of its long tenured executives over their obligations to their shareholders and other Midwest stakeholders."
"Moreover, we have outlined a comprehensive plan that demonstrates how AirTran would generate greater service, economic growth and jobs in Milwaukee than the 'stand-alone plan' -- strategic rationale does not appear to be a factor."
"Despite the Board's rejection, we will move forward with our exchange offer and pursue the election of our three nominees to fill positions on the Midwest board of directors at the now rescheduled June 14 annual meeting of the Midwest shareholders. We have already received an outpouring of support from Midwest shareholders who see the compelling benefits of bringing these two airlines together to create a highly efficient airline with a broad national network, better positioned for success in an increasingly competitive environment, and we look forward to hearing their voices on June 14 when they will make known their desire to either continue on the current plan which has reaped no material growth or profits in five years or join with AirTran to create a formidable competitor that will bring greater value to shareholders, jobs to employees, and growth for the Milwaukee region," concluded Leonard.
Midwest shareholders with questions about how to tender their shares may call AirTran's Information Agent, Innisfree M&A Incorporated, toll-free at 877-456-3422. (Banks and Brokers may call collect at 212-750-5833).
