Midwest Air agrees to talk with AirTran
By Emily Fredrix, Associated Press
Last update: July 31, 2007 – 9:04 PM
MILWAUKEE - Midwest Air Group Inc. finally says it may be ripe for selling.
The regional airline that for months has fought a hostile buyout by AirTran Holdings Inc. signaled Tuesday that it will consider the $389 million offer.
Midwest, operator of Midwest Airlines, announced that a committee of its board of directors will start discussions with AirTran. The operator of low-cost AirTran Airways has long argued a combination of the two would create a strong, national carrier.
Midwest said its committee also will meet with other companies that have recently expressed interest in the airline. It did not name those companies Tuesday and was quick to caution that the discussions do not mean a buyout is imminent.
"There is no assurance that this process will result in a transaction with AirTran or any other party," Midwest said.
But analysts, stockholders and Wall Street think otherwise. Midwest shares soared on the news, rising $1.33, or 11 percent, to $13.94 Tuesday.
Midwest's largest shareholder, Octavian Advisors, was heartened by the news and wants the two sides to move as quickly as possible.
"We think this is a big step forward," said Richard Hurowitz, CEO of the hedge fund, which owns more than 6 percent of Midwest's stock.
AirTran said in a statement the company is likewise pleased.
"We look forward to working with them," said Joe Leonard, AirTran's chairman and chief executive.
