AirTran Chairman Joe Leonard says AirTran executives have spoken "numerous times" to Midwest Air's 20 largest shareholders, who together control around half of the company's stock. Leonard believes most of those shareholders are inclined to accept AirTran's offer of $13.25 a share.
February 8 is the closing date on the offer. When the offer expires, AirTran is required by law to disclose how many shares have been tendered to the company. AirTran also has the option of extending the offer. Even if short of a majority of the shares, AirTran might secure enough shareholder support to force Midwest Air's board to negotiate a sale of the company. The current offer of $13.25 is higher than the initial $11.25.
It looks to us like AirTran smells victory. Joe Leonard must have a good idea by now of how much support he has. Investors in Midwest must have had the story explained to them and we think even the hardiest investor must see that airlines function best when they have growth opportunities and lower costs. AirTran offers more than a stand alone plan does. Consolidation is coming to this industry.
