In response to angry investors on its last conference call saying Midwest Air Group’s (MEH) response to AirTran (AAI’s) briefing on its merger proposal was inadequate, its board formed a committee to further explore the AirTran offer as well as other offers arising over AAI’s unsolicited bid. The committee, said the company, will “explore strategic and financial alternatives that would serve to enhance value for the company's shareholders.” Investors said the board’s decision to take no action on the AirTran proposal was irresponsible to stockholders and questioned how Midwest would provide enough shareholder value to equal the AAI offer, adding that plans announced to date, are insufficient.
The board has not changed its recommendation to remain a stand-alone company. However, it does intend to begin negotiating with AirTran regarding its proposal to acquire all outstanding shares of Midwest. The committee’s mandate is to review and evaluate strategic and financial alternatives and make recommendations to the full board. Additionally, the committee intends to hold discussions with other strategic and financial parties that have recently expressed interest in pursuing a transaction with Midwest.