Midwest CEO Says "Our Shareholders Have Spoken"

Imagine, if you will, a cheesy soap opera-style drama... airing on CNBC. Midwest Air Group, Inc., parent company of Midwest Airlines, has been fending off the advances of rival suitor AirTran for months -- locked in competition for the affections of highly desirable Midwest shareholders. In Thursday's episode, we find AirTran has managed to catch the eye of the shareholders, much to Midwest's chagrin.

In a proverbial slap in the face, the shareholders told Midwest they rather like the advances of the new suitor, and would like to hear what it has to say.

Based on a preliminary review of the proxies voted at Thursday's annual meeting, shareholders have apparently chosen to elect the three directors nominated by AirTran Holding -- John Albertine, Jeffrey Erickson, and Charles Kalmbach -- to Midwest's board of nine directors, according to the carrier.

As ANN reported, two shareholder advisory firms recommended Midwest Air Group shareholders replace a few members of their board of directors with a slate nominated by AirTran, according to the Associated Press. Midwest wholeheartedly disagreed with those recommendations, and its board continued its stance of across-the-board rejection of all AirTran offers, contending the company would be more profitable by itself.

The results of the election of directors will be official when the Inspector of Election provides the Midwest corporate secretary a certified report of election results, which are expected June 26.

"This is an important victory for all Midwest shareholders," said Joe Leonard, AirTran's chairman and chief executive officer. "There is clearly a strong desire among Midwest shareholders for positive corporate governance change and for Midwest to fully and fairly consider the merits of a combination with AirTran."

Midwest also announced its board determined it will permit AirTran to make a presentation to the Midwest Air Group board regarding its proposal, but insisted it has not decided to engage in actual negotiations with the carrier. No date for the session has been set.

Timothy E. Hoeksema, chairman and chief executive officer, stated that the election of directors constitutes a definitive action by shareholders.

"While we are disappointed by today's results, we recognize that our shareholders have spoken," he said. "If today's election says anything at all, it says that our shareholders want us to listen and that is what we intend to do. The board remains fully committed to creating value for Midwest shareholders."

The company is planning a comprehensive orientation for the new directors to take place after the voting results are certified.

"The new directors, along with the entire board, will be fully accountable to all Midwest Air Group shareholders," said Hoeksema.

Stay tuned.

FMI: www.airtran.com, www.midwestairlines.com