By Lisa Kerner
Charlotte, N.C., Jan. 11 - AirTran Holdings, Inc. said is began its offer to buy all outstanding shares of Midwest Air Group, Inc. for $6.625 in cash and 0.5884 shares of AirTran common stock for each Midwest share, according to a company news release.
Total equity value of the exchange offer, which expires Feb. 8, is $345 million, or about $13.25 per Midwest share.
AirTran made the offer through its wholly owned subsidiary, Galena Acquisition Corp. The company had previously proposed an $11.25 per share price in October.
"We are committed to bringing these two great airlines together to form an even better airline based on our conviction that it is in the best interests of Midwest and AirTran shareholders, the employees of both companies and the communities the air carriers serve," AirTran chief executive officer Joe Leonard said in the release.
"While we would have wished to enter into negotiations with Midwest's board and management to consummate a definitive merger agreement, it is clear that they had no intention of doing so."
Instead, AirTran brought its offer directly to Midwest's investors.
In a letter to Midwest's board, Leonard reiterated AirTran's Oct. 20 offer of $11.25 per share for the stock. Midwest did not respond when AirTran brought the same offer to Midwest shareholders on Dec. 13, the letter stated.
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.
| Acquirer: | AirTran Holdings, Inc.
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| Target: | Midwest Air Group Inc.
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| Transaction value: | $345 million
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| Payment per share: | $13.25 ($6.625 in cash and 0.5884 shares of AirTran common stock)
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| Announcement date: | Oct. 20
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| Expected closing: | After Feb. 8
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| Stock price for target: | Amex: MEH; $12.90 on Jan. 9
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| Stock price for acquirer: | NYSE: AAI; $11.92 on Jan. 10
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