AirTran To Present Case for Midwest Airlines Buyout

Filed in archive Aviation News on July 15, 2007

On Monday, AirTran will be presenting its case to buyout Midwest Airlines to the company's board of directors. Midwest has maintained the stance that it's profitable without help from AirTran. But, a few days ago, the powers that be at Midwest Air Group Inc. changed it's mind after repeatedly rejecting offerings from AirTran.

AirTran Chairman and Chief Executive Officer Joe Leonard said the Orlando-based operator of AirTran Airways will dispel rumors about its buyout offer - AirTran does not, for instance, plan job cuts at Midwest's Milwaukee headquarters. He and other executives will make a presentation and take questions over a three-hour period, when tensions could run high, he said.

Shareholders are tendering their shares in favor of the hostile bid - now a cash and stock deal worth $389 million - so the board must set aside its feelings and listen, he said.

"I think the board has got to get over it and I think they will get over the emotion and look at this from a business standpoint," Leonard said.

The board room could be a bit more hospitable to AirTran since the company first approached Midwest about a buyout in June 2005. Midwest shareholders last month ousted three incumbent board members and replaced them with a slate nominated by AirTran. Though the three hold a minority of the nine seats, they do change the dynamics.

Midwest spokeswoman Carol Skornicka stressed that the board was not entering into negotiations. The company realized after the shareholder meeting that shareholders want them to consider the deal, she said.

"We felt the results of the proxy contest and the election of new directors signaled the shareholders would like us to at least listen to AirTran and that's what we intend to do," she said.

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