AirTran Bid Rises for Midwest
AirTran Holdings Inc. appealed directly to shareholders yesterday with a sweetened offer of about $345 million in cash and stock for rival Midwest Air Group Inc.
AirTran Holdings, which owns the discount carrier AirTran Airways, raised its offer for Midwest Air Group by almost 18 percent. Midwest, which rebuffed an earlier unsolicited bid from AirTran, said its board will evaluate the offer and make a recommendation to shareholders within 10 days.
The new offer was equivalent to $13.25 per Midwest share, based on the closing price of AirTran common stock on Monday and represented a premium of almost 3 percent over the closing share price on Wednesday.
The Midwest board on Dec. 6 turned down AirTran’s earlier offer of $11.25 per share, prompting the Orlando, Fla., discount carrier to bypass the board in its latest takeover attempt.
The offer comes only a day after US Airways Group Inc. raised its bid for Delta Air Lines Inc. by about 20 percent to $10.3 billion. Delta had rejected a previous offer and opposed the takeover bid.
Shares of Midwest set a 52-week high of $13.48 before closing at $13.40, up 50 cents, or 3.9 percent, on the American Stock Exchange. Airtran shares rose 48 cents, or 4.03 percent, to finish at $12.40 on the New York Stock Exchange.
The offer consists of $6.625 in cash and 0.5884 shares of AirTran common stock for each Midwest share.
Midwest Air Group, which operates Midwest Airline and Midwest Connect, 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 fear those touches might end if AirTran is successful in its hostile takeover.
But AirTran Chairman and Chief Executive Joe Leonard said a merger would create a more competitive company in the changing airline industry and provide better service to underserved cities such as Milwaukee and Kansas City.
AirTran served 8.27 percent of Richmond airport passengers in November, ranking fifth among carriers.
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