Suspenders! That’s what we used to say when a film or a television series ended in suspense-producing cliff-hanger. And that’s how the weekend must have been at Midwest Airlines. AirTran Airways’ hostile bid for Midwest formally expired Friday night 8 August, the uninvited suitor carrier has until Monday’s business opening to extend or revise the offer. Word emerged late Friday that Northwest Airlines was negotiating a role as a possible White Knight – not to buy Midwest but to become a passive investor in the carrier as it continues manoeuvring to avoid AirTran. An AirTran spokeswoman had no details but the Orlando-based airline said Friday evening that support for its takeover plan among Midwest shareholders now stands at nearly 63% since proxy-voting totals were last revealed.
AirTran has extended the $389-million offer and raised it more than once since it began courting Midwest. Midwest, based in Milwaukee, has resisted the cash-and-stock bid, but recently entertained a formal presentation from AirTran chief executive Joe Leonard. Leonard has sought to assuage fears among Milwaukee-area flyers about the post-merger value of their loyalty points and levels of service in the Wisconsin city. Midwest has strong local backing in the region. Midwest recently said it was negotiating with four unidentified parties who were potential acquirers or investors, and it would appear that one of these four parties is Northwest.
Separately, AirTran said in a Securities and Exchange Commission filing that it had overstated revenues in some recent years. The restatements, required under SEC rules, cut its 2005 and 2006 net income. For 2006, AirTran profit was $14.7 million, compared with a previously reported $15.5 million and in 2005, the profit was $7.5 million, compared to the previously reported $8.1 million. The carrier cited adjustments to revenues, and noted that earnings in other periods were also changed, but by insignificant amounts.