Orlando — On Thursday, AirTran Holdings Inc. extended its latest offer of $389 million in cash and stock for rival Midwest Air Group until June 8, giving more time for the proposal that has already gained the support of more than half of Midwest's shareholders.
The Orlando-based operator of low-cost carrier AirTran (nyse: AAI - news - people ) Airways said that as of Wednesday, stockholders agreed to tender 56.6 percent of the Milwaukee-based carrier's outstanding shares, or 13.9 million, to AirTran subsidiary Galena Acquisition Corp.
Milwaukee-based Midwest's board last month unanimously rejected AirTran's $15 per-share bid, calling it "inadequate" and saying the company could be more profitable alone. It is the parent company of Midwest Airlines and Midwest Connect.
Midwest spokeswoman Carol Skornicka said the offer extension was no surprise. She also downplayed the news that more than half of Midwest's shares were tendered.
"At the end of the day, the board of directors retains complete control over whether or not there will be a transaction," Skornicka said.
AirTran has been trying to acquire Midwest since 2005. The deal would form the country's second-largest low-cost carrier behind Southwest Airlines Co. (nyse: LUV - news - people ) AirTran took its courtship public in December as Midwest resisted, then directly approached the rival's shareholders with the offer that had been set to expire Wednesday.
Midwest shareholders are growing more vocal about the deal. On Thursday, Octavian Advisors LP, which owns 6.6 percent of Midwest shares, urged the company to enter good-faith talks.
"We think it would be shocking if the board does not listen to its own shareholders," Octavian CEO Richard Hurowitz said. "We don't understand how this transaction is not a win-win for everybody involved."
Midwest shares rose 40 cents to $15.50 in trading Thursday, and reached a 52-week high of $15.74 on the bid news - nearly four times its 52-week low of $4. It's a far cry from 2005, when the airline faced delisting from the New York Stock Exchange for several reasons, including dipping shares that valued it at about $50 million, less than the $75 million for 30 days in a row needed to remain on the exchange.
Airtran shares were up 33 cents to close at $12.12.
AirTran first proposed a $78 million deal - then bumped it to $11.25 a share on in October. The offer extended Thursday was up 13 percent from a previous $345 million bid. AirTran has said it will be the company's largest and last offer.
The fight could boil over at Midwest's annual meeting June 14 in Milwaukee. AirTran has nominated three members to Midwest's nine-member board, and is confident the slate will pass.
"With 57 percent tendering now, there's really no question that our candidates will be elected at the shareholder's meeting," said Kevin Healy, AirTran's vice president of planning. "Essentially what (Midwest) appears to be saying is, 'We want you to vote for our candidates, but we're going to ignore your wishes if you do.'"
If the hostile bid goes through, AirTran envisions $3.5 billion in annual revenue on some 1,000 daily departures in 74 cities. Midwest now runs about 345 flights in 50 cities - primarily in the East and West - while AirTran serves the North and South with about 700 flights a day.
Also on Thursday, Midwest announced a new agreement with Northwest Airlines (other-otc: NWACQ.PK - news - people ) Corp. that will make it easier for customers to book trips on a single ticket with either airline.
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