AAI offer extended (again)

[180ToTheMarker]

(Recasts with company confirmation; adds AirTran comment, NEW YORK dateline, byline)
By Paritosh Bansal
NEW YORK, May 17 (Reuters) - AirTran Holdings Inc. (AAI.N: Quote, Profile , Research) said on Thursday holders of nearly 57 percent of Midwest Air Group Inc. (MEH.A: Quote, Profile , Research) shares backed its hostile takeover bid, bringing it a step closer to completing the deal. "We view the significant level of tenders to date as a ringing endorsement of the business plan," said AirTran Chief Executive Joe Leonard in a statement. "We would expect Midwest's management to take this as a serious vote of no-confidence."


Midwest, which has called the roughly $389 million bid inadequate, wasn't immediately available for comment.
AirTran said 13.9 million Midwest shares, or 56.6 percent of its equity, were tendered under AirTran's cash and stock offer that expired on Thursday. AirTran on Thursday extended the offer, which is currently valued at about $15.89 a share, to June 8.
Midwest shares closed on Wednesday at $15.10.
AirTran, the 10th-largest U.S. airline by revenue, has been seeking to acquire its rival for months and has raised the bid twice.
The current offer consists of $9 in cash and 0.5842 shares of AirTran common stock for each Midwest share.
Orlando, Florida-based AirTran, parent of low-cost carrier AirTran Airways, made its initial offer worth $290 million in October and publicized it in December. It raised the offer to $345 million in January and then to $389 million in April. Milwaukee-based Midwest has asked investors to pass on the bid and has offered a stand-alone expansion plan that calls for additional routes and fleet replacement. (Additional reporting by Chris Reiter)
© Reuters 2007. All Rights Reserved

 

[75M]

AirTran said 13.9 million Midwest shares, or 56.6 percent of its equity, were tendered under AirTran's cash and stock offer that expired on Thursday.

Done deal?

 

[Britpilot]

Looks a lot closer to a done deal.

 

[gt1900]

Midwest is still saying the offer is inadequate.. Now its gonna get ugly.. I have a feeling Midex is going to pull out all the stops to keep this from going through.. I don't think they understand how stuborn AAI is going to be.. AAI may only get 3 people on the board in June, but AAI will stay around until the next election of board members... Either way, this deal will eventually happen, its just a matter of how ugly Midex wants to make it...... If I was a major shareholder I would be pissed at Midex management.. Obviously, they are not thinking about the shareholders anymore, because the shareholders have spoken.. And Midwest isn't listening...

 

[248to2.8]

When have they ever listened to anybody but themselves? Until AAI made this offer, they were happy with the status quo. The MEH hanger won't even accomodate a plane taller than an 80, and they designed it that way on purpose.

 

[Eagle757shark]

Now that AirTran by law will have the address of each investor, they will be able to communicate individually with each shareholder AirTran's business plan. Look for more shares too be tendered at the next deadline. The shareholder meeting in mid June will be very interesting.

 

[meanstreak]

Tell me more about this poison pill they have? When and how can they use it? What does it mean? Thanks

 

[maxblast72]

Not exactly sure what the poison pill is but have heard that Midwest can issue more shares of stock that don't cost them anything to dilute the % of shares tendered to Airtran to prevent being "taken" over. Also, that we were trying to get 3 members that are Airtran friendly on the board since it takes a 75% vote to introduce the poison pill and having 3 Airtran friendly board members (out of 9) would prevent them from having a 75% vote.

 

[Max Powers]

Also Midwest can enact a Wisconsin Law which would somehow review or disallow any sort of take over if it is not in the best interests of the states citizens/employees. Or something to that effect

 

[General Lee]

Airtran wants to do something with all of the 737-700s they are getting (80 over 5 years), and since ATL didn't build an extra terminal for them (since we were in BK), they still don't have the extra space in ATL. So, they would LOVE to replace the Midwest MD82s/MD88s with new 737-700s, and expand. I think it is a good idea.


Bye Bye--General Lee