Posted January 18, 2007
[SIZE=+2]Shareholder sues Midwest Air over poison pill [/SIZE]
[FONT=Arial, Helvetica, sans-serif]The Associated Press
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MILWAUKEE — A shareholder of Midwest Air Group Inc. has filed a lawsuit to get the company to suspend a provision that would prevent hostile takeovers.
A suspension of the so-called “poison pill” would make it easier for rival AirTran Holdings Inc. to complete its proposed hostile takeover of the Milwaukee-based company, which operates Midwest Airlines.
AirTran Holdings Inc. announced in mid-December that Midwest Air Group rejected its takeover bid worth about $290 million.
Last week, the Orlando, Fla.-based company raised its bid to $345 million in cash and stock. Midwest said its board will evaluate the offer and make a recommendation to shareholders within 10 days.
The lawsuit was filed Monday by Linda Garrett of Lufkin, Texas, in Milwaukee County Circuit Court. The suit is seeking class-action status, Gregory Nespole, an attorney for Garrett, said Wednesday.
Garrett wants Midwest Air to be ordered to drop the poison pill provision, said Nespole, with Wolf Haldenstein Adler Freeman & Herz in New York.
The so-called poison pill allows Midwest to issue more shares if one stockholder acquires at least 15 percent of the company. The provision essentially makes it more difficult for a company to have a hostile takeover of Midwest Air.
A message left at Midwest’s headquarters seeking comment was not immediately returned Thursday.
Carol Skornicka, Midwest’s senior vice president of corporate affairs, has said earlier that the company’s board would not directly respond to the enhanced offer from AirTran.
Midwest promotes itself as “the best care in the air,” with its wide leather seats and chocolate chip cookies baked on board. Some passengers and shareholders have said they expect those touches would end if AirTran is successful in its hostile takeover.
AirTran chairman Joe Leonard has said the merger would combine the best of both airlines, including the traditional Midwest perks.
Leonard said when announcing the higher offer last week he wanted shareholders to support the acquisition. Leonard has said to complete the deal, Midwest would have to voluntarily get rid of the poison pill.
Ralph C. Anzivino, a professor at the Marquette University Law School, said someone would have to prove a claim of fraud to invalidate the measure.
Nespole said Midwest renewed the provision last February. He said at that time, company management said that action was not taken in response to a specific offer.
But AirTran, he said, had approached Midwest in December 2005 and asked the board to negotiate a sale. That’s why he feels Midwest’s statement about extending the provision was not true.
On Thursday, AirTran continued its campaign of rounding up support for the merger. The company issued another statement saying Midwest’s plan to remain independent is not viable and the two companies should combine.
Shares of Midwest Air Group fell 11 cents to close at $13.15 on the American Stock Exchange on Thursday. Shares of AirTran fell 36 cents, or 2.9 percent, to close at $12.07 on the New York Stock Exchange
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[SIZE=+2]Shareholder sues Midwest Air over poison pill [/SIZE]
[FONT=Arial, Helvetica, sans-serif]The Associated Press
[FONT=Arial, Helvetica, sans-serif]
MILWAUKEE — A shareholder of Midwest Air Group Inc. has filed a lawsuit to get the company to suspend a provision that would prevent hostile takeovers.
A suspension of the so-called “poison pill” would make it easier for rival AirTran Holdings Inc. to complete its proposed hostile takeover of the Milwaukee-based company, which operates Midwest Airlines.
AirTran Holdings Inc. announced in mid-December that Midwest Air Group rejected its takeover bid worth about $290 million.
Last week, the Orlando, Fla.-based company raised its bid to $345 million in cash and stock. Midwest said its board will evaluate the offer and make a recommendation to shareholders within 10 days.
The lawsuit was filed Monday by Linda Garrett of Lufkin, Texas, in Milwaukee County Circuit Court. The suit is seeking class-action status, Gregory Nespole, an attorney for Garrett, said Wednesday.
Garrett wants Midwest Air to be ordered to drop the poison pill provision, said Nespole, with Wolf Haldenstein Adler Freeman & Herz in New York.
The so-called poison pill allows Midwest to issue more shares if one stockholder acquires at least 15 percent of the company. The provision essentially makes it more difficult for a company to have a hostile takeover of Midwest Air.
A message left at Midwest’s headquarters seeking comment was not immediately returned Thursday.
Carol Skornicka, Midwest’s senior vice president of corporate affairs, has said earlier that the company’s board would not directly respond to the enhanced offer from AirTran.
Midwest promotes itself as “the best care in the air,” with its wide leather seats and chocolate chip cookies baked on board. Some passengers and shareholders have said they expect those touches would end if AirTran is successful in its hostile takeover.
AirTran chairman Joe Leonard has said the merger would combine the best of both airlines, including the traditional Midwest perks.
Leonard said when announcing the higher offer last week he wanted shareholders to support the acquisition. Leonard has said to complete the deal, Midwest would have to voluntarily get rid of the poison pill.
Ralph C. Anzivino, a professor at the Marquette University Law School, said someone would have to prove a claim of fraud to invalidate the measure.
Nespole said Midwest renewed the provision last February. He said at that time, company management said that action was not taken in response to a specific offer.
But AirTran, he said, had approached Midwest in December 2005 and asked the board to negotiate a sale. That’s why he feels Midwest’s statement about extending the provision was not true.
On Thursday, AirTran continued its campaign of rounding up support for the merger. The company issued another statement saying Midwest’s plan to remain independent is not viable and the two companies should combine.
Shares of Midwest Air Group fell 11 cents to close at $13.15 on the American Stock Exchange on Thursday. Shares of AirTran fell 36 cents, or 2.9 percent, to close at $12.07 on the New York Stock Exchange
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