Key deadline today for AirTran bid

AirTran's dogged, slow-motion pursuit of Midwest Airlines reaches a revealing deadline today when Midwest shareholders are due to respond to a third takeover offer.

Midwest shareholders in favor of AirTran's hostile, $15-a-share, $389 million, cash-and-stock bid must agree to tender their shares by midnight. The results are expected Thursday.

Richard Magurno, AirTran's general counsel, said executives are hoping for a "substantial showing of interest" among Midwest shareholders that could pressure Midwest's board to sell --- or at least prod them into detailed merger talks.

"We're highly confident we'll have a substantial number of shares tendered," Magurno said.

Carol Skornicka, Milwaukee-based Midwest's general counsel, said the airline is unlikely to be swayed by the number of shares tendered, and she called the tally a "referendum, or a straw poll."

"The Midwest board retains total control over whether there will be a transaction," Skornicka said. "At the end of the day, Wisconsin's anti-takeover laws still apply, and our board has expressed no interest in waiving those provisions."

Wisconsin law gives Midwest the ability to issue additional shares if a single owner acquires more than 15 percent of its stock. The Midwest board also is required to consider the potential negative impact a takeover could have on employees and local communities.

AirTran, which has its main hub in Atlanta and an Orlando headquarters, has said it will add flights and jobs at Midwest's hubs in Milwaukee and Kansas City if its takeover succeeds. But AirTran's hostile bid is deeply unpopular in Wisconsin, where local travelers identify with the quirky carrier that offers broad leather seats and fresh-baked chocolate chip cookies on most flights.

More than 32,000 people have signed an electronic anti-merger petition on SaveTheCookie.com, a Web site Midwest created and maintains.

AirTran says the acquisition will allow it to diversify its base beyond Atlanta, where two-thirds of its flights begin or end. It also could create a national discount network to rival industry leader Southwest Airlines and fend off leaner, post-Chapter 11 legacy carriers Delta and, soon, Northwest.

AirTran's previous tender offers for Midwest won support from the owners of just 1.7 million of the company's 24.1 million outstanding shares. But AirTran said institutional investors have been buying large stakes in Midwest recently, and they typically wait until the last possible moment to commit.

If the tally doesn't persuade Midwest to merge --- or AirTran to give up --- the battleground will shift to Milwaukee, where Midwest's annual meeting is scheduled for June 14. There, AirTran will seek to install its own slate of three directors to Midwest's board.

If elected, the AirTran candidates would presumably work from inside to promote an acquisition. But they would constitute a minority on Midwest's dozen-member board, and their influence would likely be limited.

AirTran's Magurno said the company will evaluate its options after it gauges the results of the tender offer.

"I'm not expecting a neat, clean resolution," he said.

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