AirTran Extends Midwest Bid as Majority of Holders Sell Shares
AirTran Holdings said Thursday holders of nearly 57 percent of Midwest Air Group shares backed its hostile takeover bid, bringing it a step closer to completing the deal.
"We view the significant level of tenders to date as a ringing endorsement of the business plan," said AirTran Chief Executive Joe Leonard in a statement. "We would expect Midwest's management to take this as a serious vote of no-confidence."
Midwest, which has called the roughly $389 million bid inadequate, wasn't immediately available for comment.
AirTran said 13.9 million Midwest shares, or 56.6 percent of its equity, were tendered under AirTran's cash and stock offer that expired Thursday. AirTran Thursday extended the offer, which is currently valued at about $15.89 a share, to June 8.
Midwest shares closed on Wednesday at $15.10.
AirTran, the 10th-largest U.S. airline by revenue, has been seeking to acquire its rival for months and has raised the bid twice.
The current offer consists of $9 in cash and 0.5842 shares of AirTran common stock for each Midwest share.
Orlando, Florida-based AirTran, parent of low-cost carrier AirTran Airways, made its initial offer worth $290 million in October and publicized it in December. It raised the offer to $345 million in January and then to $389 million in April.
Milwaukee-based Midwest has asked investors to pass on the bid and has offered a stand-alone expansion plan that calls for additional routes and fleet replacement.