Friday, January 26, 2007
MIDWEST AIR PRESIDENT DEFENDS DECISION TO SPURN AIRTRAN
To the surprise of few, Midwest Air Group Inc. board today turned down an AirTran Holdings offer of $13.25 a share and unanimously recommended that its shareholders also reject the bid.
Tim Hoeksema, Midwest’s chairman and president, said AirTran’s latest offer continues to undervalue Midwest and that selling to Florida-based AirTran would be wrong because Midwest is beginning to grow again after five years of struggles.
"It's no wonder AirTran thinks Midwest is a good company to buy,” he said. “We think we are a great company for our shareholders to own."
But he said the offer was “opportunistic and inadequate.”
Spurned yet again, AirTran CEO Joseph Leonard reacted angrily, charging that the Midwest board had “unilaterally rejected” what it termed a strong offer. Leonard urged Midwest shareholders to pressure the board and tender their shares.
Hoeksema said he remains cool to an offer by AirTran officials to sit down and talk.
“You have to remember that AirTran is a competitor,” Hoeksema said. “To bring them in and open up our books and show them all of our competitive information is something that is of concern to us.”
Hoeksema pointed to an offer last year by AirTran for $4.50 per share.
“You think we should have taken a lot of time, diverted our attention from other things … and open up our books to them for a $4.50 offer when our stock in the last 12 months has gone up 167 percent?” asked Hoeksema.
Hoeksema contrasted AirTran’s record with its own, saying Midwest provides a competitive, yet differentiated product, that AirTran has cut back service to smaller markets it once served and said AirTran has not been profitable.
“AirTran lacks long-term commitment to new markets,” Hoeksema said. “We’ve been committed to this market for 22 years, we continue to grow here and we are committed to this community.”
See more at www.wisbusiness.com
Posted by THE MILWAUKEE BLOG at 1:37 AM