=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2007/01/11/financial/= f072215S78.DTL --------------------------------------------------------------------- Thursday, January 11, 2007 (AP) AirTran Boosts Offer for Midwest Air By GRETCHEN EHLKE, Associated Press Writer (01-11) 07:22 PST MILWAUKEE (AP) -- AirTran Holdings Inc. raised its hostile bid for rival Midwest Air Group Inc. on Thursday by almost 18 percent to about $345 million after the regional airline rejected its previous offer last month. This time AirTran, based in Orlando, Fla., took the offer directly to shareholders, bypassing Midwest's board of directors. "We thought we would get no more consideration than we've gotten so far. We thought we'd let the owners decide," AirTran Chairman and Chief Executive Joe Leonard said in Milwaukee. AirTran earlier bid $11.25 per share for Midwest Air Group, but the Midwest board turned down the offer on Dec. 6. The new offer is equivalent to $13.25 per Midwest share, based on the closing price of AirTran common stock on Monday. The bid represents a premium of almost 3 percent over Midwest's closing share price of $12.90 on Wednesday. Carol Skornicka, Midwest's senior vice president of corporate affairs, said the company's board "won't be engaged directly in responding" to the latest offer. She said it "was somewhat surprising that they would go directly to shareholders at this stage." "We expected that they would do something. They said they would be back. This is kind of an accelerated process," Skornicka said. Midwest shares rose 27 cents, or 2.1 percent, to $13.17 in morning tradi= ng Thursday on the American Stock Exchange. Airtran shares rose 24 cents to $12.16 on the New York Stock Exchange. Midwest promotes itself as "the best care in the air," with its wide leather seats and chocolate chip cookies baked on board. Some passengers and shareholders believe those touches might end if AirTran is successful in its hostile takeover. But Leonard said the proposed deal would combine the best of both airlines, including the traditional Midwest perks. The offer from the parent of discount carrier AirTran Airways through subsidiary Galena Acquisition Corp. was due to expire Feb. 8. Leonard has said a combined company would reach $3.5 billion in revenues and have some 15,000 employees by the end of this year. "It is clear to most stakeholders that AirTran Airways can grow Midwest Airlines, expand the Milwaukee market and add more destinations and service beyond what Midwest can achieve independently," he said in a statement. The Air-Tran-Midwest proposal isn't the only airline merger being discussed. US Airways Group Inc. said Wednesday it will increase its offer for Delta Air Lines Inc. by almost 20 percent to $10.3 billion in cash and stock. Delta had rejected the previous offer and has been opposed to the takeover bid. United Airlines parent UAL Corp. also has explored the possibility of a merger with Continental Airlines Inc., though no agreements have been reached and a deal remains far from certain. That deal could hinge on the success or failure of US Airways' bid for Delta. Meanwhile, The Wall Street Journal reported Wednesday that Northwest Airlines Corp. and Delta, both in bankruptcy, have been talking about a possible deal. A Jan. 24 hearing has been scheduled by the Senate Committee on Commerce, Science and Transportation on the state of the airline industry and the potential impact of mergers. ___ On the Net: Midwest: AirTran: www.midwestairlines.com www.airtran.com --------------------------------------------------------= -------------- Copyright 2007 AP