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From http://www.jsonline.com/story/index.aspx?id=575148
AirTran loses ground in takeover attempt
Airline has tendered smaller proportion of Midwest shares than originally thought
By TOM DAYKIN
[email protected]
Posted: March 8, 2007
AirTran Holdings Inc.'s hostile takeover bid for Midwest Air Group Inc. has garnered a lower proportion of shares than initially reported.
AirTran said Wednesday that Midwest shareholders have so far tendered 1.78 million shares. That was initially thought to be 9.6% of Midwest's outstanding shares, estimated at 18.6 million.
But Midwest Air, corporate parent of Midwest Airlines and Midwest Connect, had an estimated 24.4 million shares outstanding as of Feb. 28, a Midwest Air executive said Thursday.
Under the higher amount, AirTran's proportion of tendered shares drops to 7.3%.
Carol Skornicka, Midwest Air's senior vice president of corporate affairs, said that number of shares has increased in recent weeks.
The actual number of a publicly traded company's outstanding shares can change from day to day, Skornicka said. For example, an executive can use his stock options to buy additional shares.
The big jump in Midwest Air's shares occurred when investors that held senior secured convertible debt for Midwest Air chose to convert their positions to equity, Skornicka said.
The conversion, which Midwest announced Feb. 21, resulted in a $21.6 million debt reduction for the company. The conversion increased shareholders' equity and resulted in a reduction of $1.5 million in annual interest expense, Midwest said.
Midwest Air raised $25 million of convertible debt in 2003. All other debt holders have previously converted their holdings to equity.
AirTran has extended its buyout offer to April 11. It had been scheduled to expire Thursday. AirTran shares closed up 15 cents at $10.10 Thursday while Midwest shares closed up 39 cents at $11.74.
AirTran loses ground in takeover attempt
Airline has tendered smaller proportion of Midwest shares than originally thought
By TOM DAYKIN
[email protected]
Posted: March 8, 2007
AirTran Holdings Inc.'s hostile takeover bid for Midwest Air Group Inc. has garnered a lower proportion of shares than initially reported.
AirTran said Wednesday that Midwest shareholders have so far tendered 1.78 million shares. That was initially thought to be 9.6% of Midwest's outstanding shares, estimated at 18.6 million.
But Midwest Air, corporate parent of Midwest Airlines and Midwest Connect, had an estimated 24.4 million shares outstanding as of Feb. 28, a Midwest Air executive said Thursday.
Under the higher amount, AirTran's proportion of tendered shares drops to 7.3%.
Carol Skornicka, Midwest Air's senior vice president of corporate affairs, said that number of shares has increased in recent weeks.
The actual number of a publicly traded company's outstanding shares can change from day to day, Skornicka said. For example, an executive can use his stock options to buy additional shares.
The big jump in Midwest Air's shares occurred when investors that held senior secured convertible debt for Midwest Air chose to convert their positions to equity, Skornicka said.
The conversion, which Midwest announced Feb. 21, resulted in a $21.6 million debt reduction for the company. The conversion increased shareholders' equity and resulted in a reduction of $1.5 million in annual interest expense, Midwest said.
Midwest Air raised $25 million of convertible debt in 2003. All other debt holders have previously converted their holdings to equity.
AirTran has extended its buyout offer to April 11. It had been scheduled to expire Thursday. AirTran shares closed up 15 cents at $10.10 Thursday while Midwest shares closed up 39 cents at $11.74.
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