ORLANDO, Fla.,
Jan. 11 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc.
(NYSE: AAI) ("AirTran"), the parent company of AirTran Airways, today
announced that it has commenced an exchange offer for all of the outstanding
shares of Midwest Air Group (Amex: MEH) ("Midwest"), for
$13.25 per Midwest
share, based on the closing price of AirTran common stock on
January 8, 2007.
The offer consists of
$6.625 in cash and 0.5884 shares of AirTran common stock
for each Midwest share. The total equity value of the exchange offer is
$345
million. The offer, which is being made through Galena Acquisition Corp., a
wholly owned subsidiary of AirTran, represents a premium of 61 percent over
the thirty day average closing price of Midwest common stock at the time of
AirTran's initial proposal to acquire all of Midwest's common stock at a price
of
$11.25 per share on
October 20, 2006, and an approximately 46 percent
premium over the closing price the day prior to
December 13, 2006, the date on
which AirTran disclosed its
October 20, 2006, offer.
"We are committed to bringing these two great airlines together to form an
even better airline based on our conviction that it is in the best interests
of Midwest and AirTran shareholders, the employees of both companies and the
communities the air carriers serve," said Joe Leonard, AirTran Airways'
chairman and chief executive officer. "Together, we will be in a stronger
position to compete in the changing airline marketplace, to grow underserved
cities like Milwaukee and Kansas City, increase employment and advancement
opportunities, and to provide our customers with the high quality service they
value."
"While we would have wished to enter into negotiations with Midwest's
Board and management to consummate a definitive merger agreement, it is clear
that they had no intention of doing so. Largely due to the overwhelming
support we have received for the combination from Midwest shareholders,
employees, customers and the communities Midwest serves, after the disclosure
of our October 20th proposal, we decided to bring our offer directly to
Midwest's investors," he added.
"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. With our fleet commonality,
comparable corporate cultures, commitments to quality service and
complementary route networks, we are an ideal partner for Midwest," Leonard
added.
"We feel so strongly about the merits of this combination that we are
enhancing the value in our actual exchange offer despite the already
attractive premium and the fact that Midwest has denied our request to review
non-public financial and other information. Even with the increase in the
price we are offering, we still expect the transaction to be accretive to
earnings by the end of the first full year following the close of the
transaction and significantly accretive thereafter," Leonard concluded.
AirTran is offering to acquire all of the outstanding shares of Midwest
through its newly formed subsidiary, Galena Acquisition Corp., which was
organized in connection with this offer. This exchange offer is the first
step in AirTran's plan to acquire all of the outstanding shares of Midwest
common stock. AirTran intends, promptly after completion of the offer, for
Midwest to consummate a second-step merger whereby Midwest common stock would
be converted into the right to receive the same number of shares of AirTran
common stock and the same amount in cash per Midwest share as paid in the
exchange offer.
The exchange offer will be subject to customary conditions, including the
tender of a majority of Midwest shares, calculated on a fully diluted basis;
redemption of the Midwest rights under its Rights Agreement, commonly known as
a poison pill, certain actions to ensure that the Wisconsin control share
acquisition statute and business combination statute are not applicable to
AirTran following the exchange offer; the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act ("HSR") and certain other regulatory approvals.
The exchange offer is scheduled to expire at 12:00 midnight, New York City
time, on February 8, 2007, unless the exchange offer is extended.
Morgan Stanley and Credit Suisse are serving as AirTran's financial
advisors and the dealer managers and Smith, Gambrell & Russell, LLP, is
serving as AirTran's legal advisor. Innisfree M&A Incorporated is serving as
its Information Agent.
Shareholder questions regarding the exchange offer or requests for
offering materials should be directed to Innisfree M&A Incorporated at
(877) 456-3422. (Banks and Brokers may call collect at 212-750-5833).
Offering materials are also available on the SEC's website at
http://www.sec.gov. Midwest shareholders are urged to read the offering
materials filed by AirTran, which contain important information about the
exchange offer.
AirTran executives will be discussing the exchange offer on a Webcast
conference call with the investment community at 10:00 a.m. EST/9:00 a.m. CST
today, January 11, 2007. To access the Webcast go to
http://investor.airtran.com. A replay of the call will be available on the
AirTran Airways Web site.
THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO PURCHASE OR A
SOLICITATION OF AN OFFER TO SELL, WHICH MAY BE MADE ONLY PURSUANT TO THE TERMS
OF THE OFFER TO EXCHANGE AND RELATED LETTER OF TRANSMITTAL FILED TODAY WITH
THE SECURITIES AND EXCHANGE COMMISSION. THE OFFER IS NOT BEING MADE TO, NOR
WILL TENDERS BE ACCEPTED FROM, OR ON BEHALF OF, HOLDERS OF MIDWEST SHARES IN
ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF
WOULD NOT COMPLY WITH THE LAWS OF THAT JURISDICTION.
AirTran Airways, a Fortune 1000 company and one of America's largest low-
fare airlines with 8,000 friendly, professional Crew Members, operates nearly
700 daily flights to 52 destinations. The airline's hub is at Hartsfield-
Jackson Atlanta International Airport, where it is the second largest carrier.
AirTran Airways' aircraft features the fuel-efficient Boeing 737-700 and
717-200 to create America's youngest all-Boeing fleet. The airline is also
the first carrier to install XM Satellite Radio on a commercial aircraft and
the only airline with Business Class and XM Satellite Radio on every flight.
For reservations or more information, visit http://www.airtran.com (America
Online Keyword: AirTran).
Forward Looking Information
Certain of the statements contained herein should be considered "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements may be identified by
words such as "may," "will," "expect," "intend," "indicate," "anticipate,"
"believe," "forecast," "estimate," "plan, " "guidance," "outlook," "could,"
"should," "continue" and similar terms used in connection with statements
regarding the outlook of AirTran Holdings, Inc., (the "Company"). Such
statements include, but are not limited to, statements about expected fuel
costs, the revenue and pricing environment, the Company's expected financial
performance and operations, future financing plans and needs, overall economic
conditions and the benefits of the business combination transaction involving
Midwest Air Group, Inc. ("Midwest") and the Company, including future
financial and operating results and the combined companies' plans, objectives,
expectations and intentions. Other forward-looking statements that do not
relate solely to historical facts include, without limitation, statements that
discuss the possible future effects of current known trends or uncertainties
or which indicate that the future effects of known trends or uncertainties
cannot be predicted, guaranteed or assured. Such statements are based upon
the current beliefs and expectations of the Company's management and are
subject to significant risks and uncertainties that could cause the Company's
actual results and financial position to differ materially from the Company's
expectations. Such risks and uncertainties include, but are not limited to,
the following: the Company's ability to achieve the synergies anticipated as
a result of the potential business combination transaction involving Midwest
and to achieve those synergies in a timely manner; the Company's ability to
integrate the management, operations and labor groups of the Company and
Midwest; the impact of high fuel costs; significant disruptions in the supply
of aircraft fuel and further significant increases to fuel prices; the
Company's ability to attract and retain qualified personnel; labor costs and
relations with unionized employees generally and the impact and outcome of
labor negotiations; the impact of global instability, including the current
instability in the Middle East, the continuing impact of the U.S. military
presence in Iraq and Afghanistan and the terrorist attacks of September 11,
2001, and the potential impact of future hostilities, terrorist attacks,
infectious disease outbreaks or other global events that affect travel
behavior; adequacy of insurance coverage; reliance on automated systems and
the potential impact of any failure or disruption of these systems; the
potential impact of future significant operating losses; the Company's ability
to obtain and maintain commercially reasonable terms with vendors and service
providers and its reliance on those vendors and service providers; security-
related and insurance costs; changes in government legislation and regulation;
the Company's ability to use pre-merger NOLs and certain tax attributes;
competitive practices in the industry, including significant fare
restructuring activities, capacity reductions and in-court or out-of-court
restructuring by major airlines and industry consolidation; interruptions or
disruptions in service at one or more of the Company's hub airports; weather
conditions; the impact of fleet concentration and increased maintenance costs
as aircraft age and utilization increases; the Company's ability to maintain
adequate liquidity; the Company's ability to maintain contracts that are
critical to its operations; the Company's fixed obligations and its ability to
obtain and maintain financing for operations, aircraft financing and other
purposes; changes in prevailing interest rates; the Company's ability to
operate pursuant to the terms of its financing facilities (particularly the
financial covenants); the Company's ability to attract and retain customers;
the cyclical nature of the airline industry; economic conditions; and other
risks and uncertainties listed from time to time in the Company's reports to
the Securities and Exchange Commission. There may be other factors not
identified above of which the Company is not currently aware that may affect
matters discussed in the forward-looking statements, and may also cause actual
results to differ materially from those discussed. All forward-looking
statements are based on information currently available to the Company. The
Company assumes no obligation to publicly update or revise any forward-looking
statement to reflect actual results, changes in assumptions or changes in
other factors affecting such estimates. Additional factors that may affect
the future results of the Company are set forth in the section entitled "Risk
Factors" in the Company's Annual Report on Form 10-K/A for the period ended
December 31, 2005, which is available at http://www.sec.gov and at
http://www.airtran.com.
Additional Information
Subject to future developments, AirTran may file with the United States
Securities and Exchange Commission a registration statement to register the
AirTran shares which would be issued in the proposed transaction and/or a
proxy statement with respect to the proposed transaction. Investors and
security holders are urged to read the registration statement and/or proxy
statement (when and if available) and any other relevant documents filed with
the SEC, as well as any amendments or supplements to those documents, because
they will contain important information. Investors and security holders may
obtain a free copy of the registration statement and/or proxy statement (when
and if available) at http://www.sec.gov. The registration statement and/or
proxy statement (when and if available) and such other documents may also be
obtained free of charge from AirTran by directing such request to: Richard P.
Magurno, Corporate Secretary, AirTran Holdings, Inc., 9955 AirTran Boulevard,
Orlando, Florida 32827.
Media Contacts: Tad Hutcheson
tad.hutcheson@airtran.com
678.254.7442
Judy Graham-Weaver
judy.graham-weaver@airtran.com
678.254.7448
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