Midwest To Talk Merger With AirTran

[FlyAirtran]

http://www.btnmag.com/businesstravelnews/search/article_display.jsp?vnu_content_id=1003618942

Midwest To Talk Merger With AirTran, Others

JULY 31, 2007 -- Midwest Airlines' board of directors today said it has formed a committee to "explore strategic and financial alternatives," including talks with takeover hopeful AirTran Airways and other undisclosed "financial parties that have recently expressed interest in pursuing a transaction with Midwest."

The board said it has not changed its recommendation to forego a merger with AirTran in favor of its go-it-alone plan, but the newly established committee said it would make a recommendation to the board after exploring alternatives. "There is no assurance that this process will result in a transaction with AirTran or any other party," Midwest said today in a statement.

Since AirTran began pursuing its hostile takeover bid late last year, a reluctant Midwest has been confronted with extended deadlines as well as pressure from some shareholders. Midwest last month said it would allow AirTran's parent company to present its $389 million merger proposal, following preliminary results that showed the election of three AirTran-nominated candidates to Midwest's board, which Midwest management had opposed. One of AirTran's confirmed nominees is on Midwest's five-person exploratory committee.

AirTran chairman and CEO Joe Leonard in a statement today said, "We are pleased that Midwest has taken the step to form a special committee, and we look forward to working with the committee."

Samuel Skinner, head of Midwest's committee and a former Secretary of the U.S. Department of Transportation, in a statement said, "On April 12, the board recommended that shareholders reject the most recent AirTran offer. At that time, the board concluded that Midwest's strategic plan provides more attractive long-term value-creation opportunities for shareholders," he explained. "By providing AirTran and other interested parties with access to our confidential information and holding discussions with them, the board is pursuing a process to evaluate whether greater value can be delivered to shareholders through a near-term transaction."

Midwest would not give a timeframe for discussions, saying it "cannot commit to when it will comment further."

 

[Lear70]

and other undisclosed "financial parties that have recently expressed interest in pursuing a transaction with Midwest."

I call bullsh*t.

Other, undisclosed financial parties... only NWA at a drastically lower price to prevent AirTran from obtaining such unrestricted access to the market.

 

[PCL_128]

I call bullsh*t.

Other, undisclosed financial parties... only NWA at a drastically lower price to prevent AirTran from obtaining such unrestricted access to the market.

Exactly. I can't imagine that any other airline would have the slighest interest in acquiring an airline with a bunch of 717s and a few maddogs. Typical BS to feed to the financial press. Looks like Timmy is finally starting to see the light. I bet they put together the framework for an agreement within the next month.

 

[CitationLover]

I call bullsh*t.

Other, undisclosed financial parties... only NWA at a drastically lower price to prevent AirTran from obtaining such unrestricted access to the market.

for the longest time a rumor was running that Sen. Herb Kohl was interested in purchasing the airline and taking it back private. who knows.

 

[CitationLover]

....I bet they put together the framework for an agreement within the next month.

just like you predicted oil be under $40..........

 

[GOULET!]

Interesting that you bring up Sen. Kohl. He was spotted at the airport in MKE yesterday. Could be just coincidence but very interesting timing. I would love to see him take over the airline and make it private.

Wouldn't be suprised at all if SkyWest is another airline interested in Midwest. Already flying CRJs for the Air Group and they have always expressed interest in bigger airplanes.

AirTran is junk. Id much rather have SkyWest buy Midwest than AirTran.

 

[PCL_128]

just like you predicted oil be under $40..........

Hey, the deadline ain't up on that yet!

 

[Lear70]

Interesting that you bring up Sen. Kohl. He was spotted at the airport in MKE yesterday. Could be just coincidence but very interesting timing. I would love to see him take over the airline and make it private.

Wouldn't be suprised at all if SkyWest is another airline interested in Midwest. Already flying CRJs for the Air Group and they have always expressed interest in bigger airplanes.

AirTran is junk. Id much rather have SkyWest buy Midwest than AirTran.

Yeah. AirTran is junk. Especially with that profit we posted last quarter and not mentioning the last many profitable years. Terrible airline. Just awful financials.

Compared to a regional who only makes money because they're paid a set fee to operate an admittedly-unprofitable airframe.

Sure, that makes sense.

Have you ever seen the data from Bombardier on operating cost with current fuel prices? Ever heard of Independence Air?

No way you can make money off 50-seat RJ's with today's fare and oil prices. Skywest is profitable because of how much they are paid to operate the airplanes. Period.

Have any other incredibly keen financial insights to offer?

 

[Diesel-9]

I would guess Sen. Kohl gets something done or NWA gets aggressive. I doubt Joe (F.L.) Leonard will be in MKE.

 

[ultrarunner]

The price of MEH stock is too high to consider a pvt equity buyout. The time for that would have been at the 5 or 6 dollar price.

Kohl or any other private equity is STILL going to want a return on their investment. It's as simple as that.

And remember, pvt equity buyouts are NOT the answer for the lack of a sound business plan which provides a return on shareholder investment. If you have the latter, you don't sweat the former and we're not even having this discussion.