AirTran Increases Offer for Midwest Air

ORLANDO, Fla. – AirTran Holdings Inc. raised its offer for Midwest Air Group Inc. on Thursday by almost 18 percent to about $345 million after its earlier bid for the regional airline was rejected last month.

The new offer is equivalent to $13.25 per Midwest share, based on the closing price of AirTran common stock on Monday. The offer consists of $6.625 in cash and 0.5884 shares of AirTran common stock for each Midwest share.

The offer through subsidiary Galena Acquisition Corp. was due to expire Feb. 8.

AirTran, based in Orlando, had first bid $11.25 per share on Oct. 20 for the Milwaukee-based carrier, but had said it was prepared to increase its offer.

AirTran Chairman and Chief Executive Joe Leonard said in a letter to Midwest’s board that it wasn’t easy to increase the offer.

"However, we are willing to take this step because we fully believe that a combined AirTran and Midwest, whose shareholder base will consist of holders of both of our companies, will generate the value needed to justify our increased offer," he said.

Leonard has said a combined company would reach $3.5 billion in revenues and have some 15,000 employees by the end of this year.

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On the Net:

Midwest: http://www.midwestairlines.com

AirTran: http://www.airtran.com