Shareholders Encouraged to Elect AirTran’s Slate of Nominees
ORLANDO, Fla., – AirTran Holdings, Inc. (NYSE: AAI), the parent of AirTran Airways, announced that it has mailed to Midwest Air Group (Amex: MEH) („Midwest“) shareholders of record its proxy materials for the upcoming annual meeting of Midwest shareholders. AirTran has proposed a slate of three nominees, Jeffrey Erickson, Charles Kalmbach and John Albertine, to the Board of Directors of Midwest.
The proxy materials mailed to shareholders were accompanied by the following letter from Joe Leonard, Chairman and CEO of AirTran.
May 18, 2007
Dear Fellow Midwest Shareholder:
We were disappointed, but not surprised, when Midwest rejected AirTran's
substantially enhanced offer of $15.00 per share, made on April 2, 2007.
Our offer represents a 65 percent premium to the $8.13 price that
Midwest stock was trading at on December 12, 2006, the day before
AirTran publicly disclosed its initial October 20, 2006, offer.
Midwest's rejection marks the third time that it has declined an AirTran
offer, and once again, this decision affecting your pocketbook has been
made without even bothering to meet with us to discuss the merits of the
proposed AirTran and Midwest combination and the value such a
combination would bring to the Midwest stakeholders.
We at AirTran do not believe Midwest's management is serving the best
interests of its constituents and, most importantly, you -- the
shareholders and owners of the Company. We believe that current
management is entrenched and currently has no intention of recommending
a combination with AirTran -- despite the clear benefits that a merger
will provide to Midwest's shareholders, employees, customers, and the
communities it serves. Therefore, AirTran seeks your support to elect at
the June 14th Annual Meeting of Midwest Shareholders three new nominees
as board members whom we believe will better represent your interests in
accordance with their duties under law.
We urge you to send Midwest's management a message they cannot ignore --
please vote to elect the three AirTran nominees on the enclosed BLUE
proxy card TODAY -- by telephone, by Internet or by signing, dating and
returning the enclosed BLUE card in the postage-paid envelope provided.
Unfortunately, the current Midwest Board has demonstrated a lack of
independence to date from management by continuing to reject AirTran's
offer despite compelling evidence that, by any measure -- financial,
network revenue and diversity, opportunities for employees, fleet plan,
cost structure, growth for the greater Milwaukee region, and most
significantly, the shareholder value creation model we have put forth --
the proposed combination of the two airlines would generate significant
value. Instead, the Midwest Board has, at least to date, "rubber
stamped" management's "stay the course, go it alone" plan. If you look
at Midwest's management's record of substantial losses over the past
five years, we believe you should ask yourself why anyone should trust
this management team to deliver on yet another new plan. The best
evidence of why not to have that trust resides in the results that
Midwest reported for the 1st Quarter of this year -- excluding special
items, it lost more this year then it did during the 1st Quarter of last
year and this is with its much touted new business plan.
In contrast to that flawed plan, AirTran's proposed combination provides
increased value to shareholders, additional jobs and more opportunities
for advancement for current employees, and an increase in daily
departures and destinations for the communities served by Midwest.
We also feel you should know, even as Midwest's management believes you
should not benefit from the significant premium and long-term value
provided by AirTran's offer, they have also taken actions that appear to
fly in the face of good corporate governance. These actions include the
following:
-- Promoting a "stay-the-course" plan that obfuscates the many
uncertainties Midwest faces vis-a-vis the future competitive
environment and will continue its track record of missing its own
growth targets. You should know that Midwest's 2007 projected
earnings per share are nearly double the estimates of most Wall
Street analysts.
-- Preventing AirTran from identifying additional value by refusing to
have any discussions with us. It is hypocritical to claim that
AirTran has undervalued Midwest while denying AirTran the basic "due
diligence" that could lead to a higher offer.
-- Failing to tell shareholders, until required to do so by SEC
disclosure regulations, that in December, in the midst of AirTran's
offer, the Board voted to increase each director's annual retainer
fee by 60% and increase by 100% the fee each director will receive
for attending meetings (and providing a $500 fee for every telephonic
meeting directors attend).
-- Committing to pay Goldman Sachs, its financial advisor, a premium if
Midwest remains independent. This approach hardly suggests that
Goldman could conduct an unbiased review of AirTran's proposal or
develop any value creation scenario.
-- Failing to tell shareholders, until required to do so by SEC
disclosure regulations, that it paid $100,000 for, and based its
recommendation to shareholders upon, the advice of an "independent"
aviation consulting firm whose chairman has been a Midwest director
for over 20 years. That consulting firm was requested to provide its
advice to the very same Board committee that is headed by the
consulting firm's own chairman.
-- Refusing to provide AirTran with a list of shareholders with the
effect of preventing us from communicating with you directly about
our offer.
-- Misleading the Midwest employees and the Milwaukee community by
claiming that the AirTran plan will result in job losses and reduced
service to Milwaukee when AirTran has described in detail how its
plan will increase service and create many more jobs in the Milwaukee
region than Midwest now
We believe that you have the right to make your voice heard in the
Midwest boardroom and take actions that YOU determine are best for you.
You will be able to act in YOUR own interest by voting to elect the
three AirTran nominees to the Midwest Board at the Annual Meeting on
June 14, 2007.
We believe our three nominees -- Jeff Erickson, Charles Kalmbach and
John Albertine -- will help restore high standards and strong corporate
governance at your company. We also believe that the election of our
nominees to Midwest's Board will better ensure that shareholders' best
interests are being served. While this slate of director candidates, if
elected, will not constitute a majority of the members of the Board, we
believe it is vital that your interests be better represented inside of
the Boardroom. It is time for a change.
We ask that you read carefully the attached Proxy Statement and then
vote FOR AirTran's nominees on the BLUE proxy card TODAY -- by
telephone, by Internet or by signing, dating and returning the enclosed
BLUE card in the postage-paid envelope provided.
Thank you for your consideration.
Joe Leonard
Chairman and Chief Executive Officer
YOUR VOTE IS IMPORTANT!
If your shares are registered in your own name, please sign, date and mail the enclosed BLUE proxy card today to AirTran, c/o Innisfree M&A Incorporated, in the postage-paid envelope provided or submit your proxy to us by telephone or via the Internet today (instructions are on your BLUE proxy card).
If your shares are held in the name of a brokerage firm, bank nominee or other institution, only it can sign a BLUE proxy card with respect to your shares and only after receiving your specific instructions. Accordingly, please contact the person responsible for your account and instruct that person to execute and return on your behalf the BLUE proxy card as soon as possible.
After signing and returning the enclosed BLUE proxy card, we urge you NOT to return Midwest’s White proxy card because only your latest dated proxy card will be counted.
If you have previously signed and returned a White proxy card to Midwest, you have every right to change your vote. You may revoke any proxy card already sent to Midwest by signing, dating and returning the enclosed BLUE proxy card in the postage-paid envelope provided.
If you have any questions about Air Tran’s Offer, or need help voting your shares at Midwest’s
Annual Meeting of Shareholders, please contact our proxy solicitor:
INNISFREE M&A INCORPORATED
Shareholders Call Toll-Free: (877) 456-3422 Banks and Brokers Call Collect:
(212) 750-5833
Midwest shareholders who have questions about how to tender their shares may call AirTran’s Information Agent, Innisfree M&A Incorporated, toll-free at 877-456-3422. (Banks and Brokers may call collect at 212-750-5833).
AirTran Airways, a Fortune 1000 company and one of America’s largest low- fare airlines with more than 8,600 friendly, professional Crew Members, operates more than 700 daily flights to 56 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 airtran.com (America Online Keyword: AirTran).
