ORLANDO, Fla., Jan. 23 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc. (NYSE: AAI), the parent company of AirTran Airways, said today that the management of Midwest Air Group Inc. (Amex: MEH) is attempting to thwart AirTran from communicating directly with the Midwest shareholders about its offer to merge the two airlines by refusing to comply with a New York State Law (Section 1315 of the Business Corporation Law), which requires Midwest to release its shareholder list to AirTran. As a result, AirTran has asked that the New York State Supreme Court direct Midwest to show cause as to why it does not have to comply with the New York Law. The Court has set a hearing on the action for January 30, 2007, at 11:00 AM.
AirTran said it is disappointed that Midwest is attempting to block AirTran from communicating with Midwest shareholders. AirTran is concerned that this is consistent with a pattern of intransigence in which the Midwest management and board has failed to provide transparency about the benefits of the merger to its shareholders, employees and the communities it serves since AirTran first presented its offer to Midwest on October 20, 2006. Midwest management has also refused to meet directly with AirTran in order to explore the benefits that such a merger could bring to the Midwest stakeholders.
AirTran, having taken its proposal directly to the Midwest owners by initiating an exchange offer, is urging shareholders to question why Midwest's management continues to restrict the flow of information to its owners if it is so confident that its independent standalone plan would deliver more value to the Midwest shareholders than the AirTran proposal.
AirTran also noted that just this morning a well respected airline financial analyst from Calyon Securities commented, "We believe Midwest faces an uncertain future as a stand-alone carrier" noting its years of losses and its limited ability to modernize and expand and the serious threat posed by an "invigorated Northwest Airlines" refocusing its attention on Milwaukee. Midwest's shareholders have a right to demand more from the Company than defensive legal maneuvering to interfere with the free flow of critical information.
"As owners of the airline, Midwest shareholders have a right to full and complete information about AirTran's $13.25 exchange offer, which represents a premium of 61% over the thirty day average closing price of Midwest common stock at the time of AirTran's October 20, 2006, proposal and an approximately 46 percent premium over the closing price on the December 13, 2006, date that AirTran disclosed its October 20, 2006, offer. The offer also offers shareholders a stake in a combined airline that will be stronger and more competitive. The two airlines have complementary routes and fleets, with the potential to grow at an expedited rate and generate an estimated $60 million in annual revenue synergies. AirTran strongly believes this is a level of growth that far exceeds what Midwest can accomplish under its standalone plan and that Midwest's standalone plan leaves the company exceedingly vulnerable to competition to the detriment of its shareholders, employees and the Milwaukee community," AirTran said.
"While we believe it is unfortunate that AirTran has been forced to bring this matter to a court of law, we intend to pursue this matter expeditiously as it is imperative that the Midwest shareholders be given the right to review AirTran's offer and choose for themselves the best course of action for their company," the company concluded.
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