AirTran supporters win three seats on Midwest board
AirTran Holdings may have nudged Midwest Air Group a step closer to a merger after its three candidates were elected yesterday to the nine-member Midwest board.
In light of the change, Midwest said it would permit AirTran to present its takeover proposal to the board. But at the same time, the Milwaukee-based carrier made a point of stating that it had made "no determination to engage in negotiations with AirTran."
Based on a preliminary vote count, AirTran nominees John Albertine, Jeffrey Erickson and Charles Kalmbach received an estimated 65% of shares voted. The results will be certified and announced June 26 (ATWOnline, June 13)
. "While we are disappointed by today's results, we recognize that our shareholders have spoken," Midwest Chairman and CEO Timothy Hoeksema said. "If today's election says anything at all, it says that our shareholders want us to listen and that is what we intend to do."
Earlier this week, AirTran extended its tender offer until Aug. 10. The offer values Midwest at $389 million in cash and stock, and thus far shareholders have agreed to tender 59.5% of all outstanding shares not owned or held by Midwest's board or management.
"This is an important victory for all Midwest shareholders," AirTran Chairman and CEO Joe Leonard said. "There is clearly a strong desire among Midwest shareholders for positive corporate governance change and for Midwest to fully and fairly consider the merits of a combination with Air Tran."
On Tuesday, Midwest announced that second-quarter earnings would "fall short of analysts' expectations" and could dip below the $8.8 million earned in the 2006 second quarter, a revelation quickly seized upon by AirTran Holdings to bolster its takeover bid.
by Sandra Arnoult