AirTran increases tender offer for Midwest, extends deadline

By Lisa Kerner

Charlotte, N.C., April 2 - AirTran Holdings, Inc. increased its tender offer for all of the outstanding shares of Midwest Air Group Inc. to $9.00 in cash and 0.5842 of a share of AirTran common stock, or about $15.00 per share, for a total equity value of $389 million.

On Jan. 11, AirTran's wholly owned subsidiary Galena Acquisition Corp. began an offer for Midwest for $6.625 in cash and 0.5884 of a share of AirTran common stock in a deal valued at $345 million, or $13.25 per share.

The revised tender offer was extended to May 16 as a result of the increase.

As of March 30, 1,703,151 shares of Midwest common stock were tendered in the offer.

In October, AirTran first offered to acquire Midwest for $11.25 per share, according to a company news release.

AirTran said it presented the increased offer now in order to give Midwest time to consider the offer prior to its May 23 annual meeting.

"We firmly believe in the underlying value and benefits of combining these companies, and we are committed to bringing together these two airlines to create a truly national airline well-positioned for success in an increasingly competitive environment," AirTran chairman and chief executive officer Joe Leonard said in the release.

"That is why we are substantially increasing our offer despite the already attractive premium we have proposed, and without any benefit from additional financial information from Midwest, which has steadfastly refused to discuss the transaction with us and to explore the benefits of this merger."

Midwest is a Milwaukee-based provider of jet service to primarily business travelers.

AirTran is the parent company of AirTran Airways, a low-fare airline based in Orlando, Fla.

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