AirTran Holdings

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AirTran Holdings (NYSE: AAI) is a Nevada corporation, based in Orlando, Florida, that operates as an airline holding company. Its primary asset is AirTran Airways.

Contents 1 History 1.1 Proposed AirTran Holding acquisition of Midwest Air Group 2 Subsidiaries 3 References 4 External links

[edit] History

After the large amount of negative publicity surrounding the Flight 592 incident, ValuJet Airlines suffered serious financial problems. On July 11, 1997, ValuJet announced it would merge with the much smaller AirWays Corp., the owner of Orlando, Florida based AirTran Airways. In November of 1997, AirTran announced it would move its headquarters to Orlando from Atlanta; on November 17, 1997, AirWays Corp. and ValuJet completed their merger and the name ValuJet was dropped.

On January 6, 1999, the board of directors of AirTran announced that Joseph Leonard had been elected to the position of Chairman, Chief Executive Officer, and President of the company.

On August 15, 2002, AirTran stock began trading on the New York Stock Exchange.

[edit] Proposed AirTran Holding acquisition of Midwest Air Group

In December, 2006, AirTran Holdings made public that in December 2005 it had approached the Board of Directors of Midwest Air Group -- owner of Midwest Airlines and Skyway Airlines which operates as Midwest Connect -- and had asked the board negotiate a sale of the company. That AirTran offer in 2005 was rebuffed by Midwest's board, which also rebuffed a second offer in late 2006. In December 2006, AirTran disclosed the rejection of both offers in hopes of bringing shareholder pressure on Midwest's board to reconsider, which the board recommended that shareholders reject.^[1][2]

On December 13, 2006, AirTran announced that it had made an offer to acquire Midwest Airlines, another operator of the Boeing 717. The offer has since been rejected by the Midwest board. On January 11, 2007, AirTran sweetened its offer for Midwest to $13.25 a share from $11.25 a share, valued at US$290 million, or a 24% premium over Midwest's trading price at the time, and AirTran took its renewed bid directly to Midwest shareholders, bypassing Midwest's board of directors; with an offer that expires on April 11, 2007. On April 2, 2007 AirTran raised its bid to $15 a share, in what CEO Joe Leonard called AirTran's final bid.^[3]

In response to AirTran's overtures, Midwest Air Group has stated publicly that it believes that it can maximize shareholder value as a stand-alone company. Midwest Air Group has said that the latest AirTran proposal rejected by its board of directors significantly undervalued Midwest and did not reflect the long-term opportunity inherent in its strategic growth plan. The company also has reiterated that its strategic business plan will offer superior value to shareholders by capitalizing on current industry conditions while remaining true to Midwest's commitment to customer service excellence.

On January 11, 2007, AirTran Holdings increased its bid for Midwest to $345 million in cash and stock, an 18% increase from their previous offer. ^[4]

On February 2, 2007, AirTran again raised its bid for Midwest to $389 million in cash and stock ($9 in cash and .5842 shares of AirTran stock totaling $15 a share). CEO Joe Leonard stated that this would be AirTran's final bid. ^[5]

In May 2007, an independent securities expert William McGinnis, CFA, published an analysis of Board of Director responsibilities related to hostile takeover offers. He utilized the AirTran offers for Midwest Airlines as the basis for this case study which is available here.

AirTran was successful in having its slate of 3 board members elected to the Midwest Air Group's board of directors in the election on June 14, 2007 at the Midwest annual meeting.^[6]

On August 12, 2007, it was announced that AirTran had lost the bid for Midwest. A private equity group, headed by TPG Capital and including Northwest Airlines, had purchased Midwest and will turn the airline into a privately funded company. ^[7]

On August 14, 2007, it was announced that AirTran had renewed their bid for Midwest at a price slightly above that of the TPG Capital offer, in theory at the request of Midwest shareholders. It should be noted that Pequot Capital Management, which owns 8.8% of Midwest, had been unhappy with the TPG Capital offer, as they felt that AirTran's cash and stock offer would result in greater gains because they felt AirTran's stock will rise in value once the acquisition of Midwest is completed. An executive at another unnamed investment group also expressed similar misgivings about the TPG Capital offer. TPG Capital's offer had been $16/share in cash, where AirTran's latest offer is $10 cash plus 0.6056 share of AirTran stock for each share of Midwest, which at the close of trading on August 13 made the value of AirTran's new offer approximately $16.25/share in cash and stock.^[8]

However, Midwest announced TPG would increase its offer to $17 per share and a definitive agreement had been reached on August 16, 2007. ^[9]

[edit] Subsidiaries

• AirTran Airways
• Galena Corp - The servicing/support company of the Airline that was created on March 24, 1999.
• Galena Acquisition Corp - set up to acquire Midwest Air Group^[10]

[edit] References

[edit] External links

• Official site

v • d • e Airline holding companies of the United States Business organizations with multiple federally certificated passenger airline holdings Alaska Air Group • Alaska Airlines • Horizon Air AMR Corporation • American Airlines • American Eagle Airlines • Executive Airlines Continental Airlines, Inc. • Continental Airlines • Continental Micronesia Delta Air Lines, Inc. • Comair • Delta Air Lines Frontier Airlines Holdings • Frontier Airlines • Lynx Aviation Matlin Patterson Global Aero Logistics • North American Airlines • World Airways Mesa Air Group • Air Midwest • Freedom Airlines • Mesa Airlines TPG Capital Midwest Air Group • Midwest Airlines Northwest Airlines Corporation • Compass Airlines • Mesaba Airlines • Northwest Airlines Pinnacle Airways Corp. • Colgan Air • Pinnacle Airlines Wexford Capital Republic Airways Holdings • Chautauqua Airlines • Republic Airlines • Shuttle America SkyWest, Inc. • Atlantic Southeast Airlines • SkyWest Airlines Trans States Holdings • GoJet Airlines • Trans States Airlines US Airways Group • Piedmont Airlines • PSA Airlines • US Airways Business organizations with single federally certificated passenger airline holdings Air Wisconsin Airlines Corporation • Air Wisconsin AirTran Holdings • AirTran Airways Allegiant Travel Co. • Allegiant Air Expressjet Holdings, Inc. • ExpressJet Airlines Gavarnie Holdings • d/b/a Island Air Gulfstream International Group • Gulfstream International Airlines Great Lakes Aviation, Ltd. • Great Lakes Airlines Hawaiian Holdings Inc. • Hawaiian Airlines Hyannis Air Service, Inc. • Cape Air Pacific Air Holdings • Pacific Wings Airlines Petters Group Worldwide • Sun Country Airlines Piedmont Aviation Services, Inc, • Pace Airlines Rubloff Jet Express (Rubloff Development Group, Inc.) • Ryan International Airlines TSI Holdings • Miami Air International TEM Enterprises, CXP Management • Xtra Airways UAL Corporation • United Airlines VAI Partners LLC Virgin Group • Virgin America Business organizations with significant federally certificated cargo airline holdings ABX Holdings Inc. • ABX Air • Air Transport International • Capital Cargo International Airlines Atlas Air Worldwide Holdings • Atlas Air • Polar Air Cargo FedEx Corporation • FedEx Express Oak Hill Capital • Cargo 360 • Southern Air Transport Saltchuk Resources • Aloha Airlines • Northern Air Cargo