AirTran Airways executives are appealing to Midwest Air shareholders for support of their tender offer to buy out the Milwaukee-based carrier.
In a letter released Friday, AirTran Chief Executive Joe Leonard and President Bob Fornaro told Midwest shareholders that the offer allows them to "speak directly to your board."
"Tender your shares pursuant to AirTran's offer, and let your board know that you want them to sit down and negotiate a merger agreement with AirTran," the letter urges.
AirTran launched a public takeover bid in December after being rebuffed privately by Midwest's management and board. It sweetened the proposal and made it a tender offer earlier this month. The offer expires Feb. 8.
In the letter to Midwest shareholders, AirTran contends the merged airline would be "a stronger, truly national low-cost carrier ... that would generate improved profit potential through a number of revenue and cost synergies."
It contends that Midwest's stand-alone growth plans are weak and would leave the company "highly vulnerable to competitive incursions" from both large and small rivals.
"If you look at Midwest's record over the past five years, it is clear that existing management has been unable to achieve anything approaching consistent profitability," the letter says.
AirTran's offer is for $13.25 per share of Midwest stock.
The merger bid by AirTran, which has its main flight hub in Atlanta, comes as rival Delta Air Lines tries to fend off a hostile bid from US Airways and talk of other potential mergers swirls across the industry.
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AirTran extended its $389 million bid until June 8 in order to gain Midwest's Board's support for the proposal.
Midwest said in a statement that shareholders should not tender their shares to AirTran, calling the latest offer "inadequate."
Midwest shareholders must make a decision
The newest bid by AirTran is valued at $15 per Midwest share, based on the closing price of AirTran common stock on Friday. That would be an 11 percent premium over Midwest Air's closing price of...