Knope2001 From United States of America, joined May 2005, 2569 posts, RR: 31 Reply 1, posted (6 years 1 month 5 days 6 hours ago) and read 5561 times:
If there was no poison pill and no anti-hostile-takeover statutes in Wisconsin, this would probably be it.
However there are.
I suspect this just sets up the boardinng meeting showdown where AirTran's three nominees may get elected to the board. If so they will be the minority at least until next year, as one of several anti-takeover measures put into place was to stagger the board terms. Only 3 of 9 members up every year.
If AirTran succeeds in getting 3 seats on the board, that in essence gives the rest of the Midwest BOD a year to (a) negotiate and come to an agreement with AirTran (b) find another buyer,either airline or equity investment group, or (c) find a way to take the company private, either with equity investors, serious debt leveraging, or both.
If have a majority of shares tendered was indeed "it", then there would be no point in them extending the offer, which they have again.
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 6, posted (6 years 1 month 5 days 5 hours ago) and read 5420 times:
Quoting SeeTheWorld (Reply 5): This is one of the most logical mergers of any I've seen in 20 years. The synergies with routes and fleets are great.
It doesn't matter what your synergies are if you take on excessive debt and a staff of ticked off employees. They will get slaughtered by access hungry airlines at MKE.
Consider this: You've done what is essentially a hostile take over, you have irritated the employees, you have no public brand loyalty and you're operatign at an airport that can be raided overnight by the other carriers who see this weakness (not to mention you probably see a few more "unscheduled" delays than normal that the other carriers won't have). That's how you get slaughtered. MKE isn't some fortress hub. It's small and ripe for raiding.
Rumorboy From United States of America, joined Aug 2002, 351 posts, RR: 1 Reply 8, posted (6 years 1 month 5 days 5 hours ago) and read 5405 times:
Even if the use the poison pill they still have majority of the shares.
Quoting DAYflyer (Reply 4): They aren't making money today, and buying Midwest isn't going to help them one bit.
Funny you say that. Airtran had a first quarter profit. Fornano announced last week they would have "record earning's" in the second quarter and been profitable on annual basis for eight years's straight.
I think when Midwest announced earnings last quarter and didn't do"as expected"(Tim's words) and then lowered guidance for the year, most share holders began to question Midwests real motives.
BigJKU From United States of America, joined Feb 2007, 728 posts, RR: 11 Reply 9, posted (6 years 1 month 5 days 4 hours ago) and read 5376 times:
It will be very sad if Airtran buys Midwest. I have had nothing but good experiences with Midwest and Airtran has never done anything for me other than be a steaming pile of junk. Missed connections, sat me on a runway for 3 hours waiting for a mechanic because they did not have one around and had to page him in that morning.
I have flown Airtran for at least 5 trips in the past couple of years and have had something go wrong in or out everytime. I am usually amazed if I hit my connection. My company no longer even tries to book with Airtran it got so bad.
Quote: MILWAUKEE, May 17 /PRNewswire-FirstCall/ -- Midwest Air Group, Inc. (Amex: MEH - News), parent company of Midwest Airlines, today responded to the announcement by AirTran Holdings, Inc. (NYSE: AAI - News) of the preliminary results of its unsolicited exchange offer, which expired yesterday and was extended until June 8.
"Nothing has changed as far as control of Midwest Air Group is concerned; no shares have been purchased by AirTran," said Carol N. Skornicka, senior vice president, general counsel and secretary. "The exchange offer is subject to numerous conditions. Regardless of the number of shares tendered, AirTran would not purchase shares unless those conditions are waived or are satisfied."
Skornicka explained that several significant actions would have to be taken by the Midwest Board of Directors for those conditions to be satisfied, including waiving the provisions of Wisconsin law that protect Wisconsin corporations from hostile takeovers. "The board has declined to take action to satisfy any of the conditions," she pointed out. "While other scenarios are theoretically possible, as a practical matter, board approval would be required for AirTran to accomplish its goal of acquiring our company."
You don't need a passport to know what state you're in...
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 13, posted (6 years 1 month 5 days 4 hours ago) and read 5286 times:
Quoting Rumorboy (Reply 8): Funny you say that. Airtran had a first quarter profit. Fornano announced last week they would have "record earning's" in the second quarter and been profitable on annual basis for eight years's straight.
At those levels, they'd be done in a week long strike.
Biggest key right here.
Quoting Mainland (Reply 12): Skornicka explained that several significant actions would have to be taken... including waiving the provisions of Wisconsin law that protect Wisconsin corporations from hostile takeovers. ..."
"The acceptance of AirTran's offer by the majority of shareholders is a clear indication of the desire of Midwest's owners for the board of directors to immediately engage in productive and good faith negotiations to effectuate a transaction," Richard Hurowitz, CEO of Octavian, said. "The number of shares already tendered into the exchange offer is remarkable given that Midwest has not yet even turned over its shareholder list to AirTran.
Boeing7E7 From , joined Dec 1969, posts, RR: Reply 15, posted (6 years 1 month 5 days 4 hours ago) and read 5235 times:
Quoting Rumorboy (Reply 14): "The number of shares already tendered into the exchange offer is remarkable given that Midwest has not yet even turned over its shareholder list to AirTran.
That's because the shareholders aren't tendering them, speculators who manage the shares are. You have an entire street of invesment strategists that are under the false impression that airline mergers are required and that the system has too much capacity. The shareholders are acting on this false advice. Not the first time, won't be the last either.
Quickmover From United States of America, joined Mar 2004, 2464 posts, RR: 0 Reply 16, posted (6 years 1 month 5 days 4 hours ago) and read 5227 times:
Quoting Boeing7E7 (Reply 6): It doesn't matter what your synergies are if you take on excessive debt and a staff of ticked off employees.
I think the only "ticked off" employees are senior management. If a majority of the shareholders want a deal, this is looking more and more like extortion at the upper levels of MEH. As far as the rest of MEH employees and pilots, I would think they would have a better chance for advancement flying company planes rather than outsourced ones.
Alphascan From United States of America, joined Nov 2003, 936 posts, RR: 14 Reply 19, posted (6 years 1 month 5 days 3 hours ago) and read 5086 times:
Quoting Knope2001 (Reply 1): If AirTran succeeds in getting 3 seats on the board, that in essence gives the rest of the Midwest BOD a year to (a) negotiate and come to an agreement with AirTran (b) find another buyer,either airline or equity investment group, or (c) find a way to take the company private, either with equity investors, serious debt leveraging, or both.
Good review of the situation. I think option (c) needs to be broken down between heavy debt leveraging or not. Probably the only path left that will not result in significant changes to the business model is taking the company private with investors who believe in the model.
Knope, as the board's resident expert on Midwest, do believe Hoeksema is up to this challenge? I mean is he the right guy to bring the company through this successfully?
"To he who only has a hammer in his toolbelt, every problem looks like a nail."
Quickmover From United States of America, joined Mar 2004, 2464 posts, RR: 0 Reply 20, posted (6 years 1 month 5 days 3 hours ago) and read 5069 times:
Quoting N917ME (Reply 18): Quoting Boeing7E7 (Reply 15):
That's because the shareholders aren't tendering them, speculators who manage the shares are.
So speculators are not shareholders and in turn are not investors? How long are these "speculators" required to hold their shares? If they are managing a hedge or mutual fund, are they required to forget about what is best for the investors of the fund (like making a profit on their shares)?
Knope2001 From United States of America, joined May 2005, 2569 posts, RR: 31 Reply 22, posted (6 years 1 month 5 days 3 hours ago) and read 5050 times:
Quoting Alphascan (Reply 19): Knope, as the board's resident expert on Midwest, do believe Hoeksema is up to this challenge? I mean is he the right guy to bring the company through this successfully?
Thanks for the compliment!
I know there are some (including employees) who are not particularly fond of Hoekesma, however I believe he is the right person for the task of trying to keep MEH out of AAI's hands at this point for several reasons:
(a) It would be hard to find somebody at this level to come in who has a greater personal interest in doing whatever it takes to keep Midwest from being sucked into another airline. He was with the company back in it's earliest formative stage when it was going to be a premium-service airline flying Appleton-Chicago-O'Hare-Atlanta/Fulton County in the early 80's. He's been at the helm through every up and down along the way, and he's not likely to let the fruits of 25+ years of work be dismantled and absorbed. If MIdwest indeed sells out to AirTran, Hoeksema
(b) He has long-standing connections within the local business community, and if anybody is going to glean support from that sector it will be him.
(c) Changing horses mid-stream in a battle like this is probably not the best course of action. Like him or not, it would be hard to find someone else to run the show who has more of a stake in it than he does.
Pure speculation on my part has the three AirTran directors elected in June, and that Midwest comes up with a non-AirTran alternative to buy the company and keep it independent. I just hope that it does not damage the company financially (like massive debt) that it does long-term damage. TIme will tell, I guess.
Cubsrule From United States of America, joined May 2004, 21294 posts, RR: 19 Reply 23, posted (6 years 1 month 5 days 2 hours ago) and read 5012 times:
Quoting DAYflyer (Reply 4): The business case for buying Midwest seems sound enough to me. How do you figure it wont help them out?
Some of you have seen this, as it's an old post of mine. But here are some potential problems
Quote: I've been thinking a lot about t he as yet unexplained reasons that a lot of shareholders are hesitant to tender, and after looking over this thread and others, I think part of the problem is that AAI is being intellectually dishonest about the merger. There are circumstances under which a FL/YX merger would make a lot of sense, but AAI is yet to articulate them. In particular, more intelligent analysis in the following areas would help get shareholders (and the MEH BoD) on board with the merger:
* AAI needs to explain the relatively poor performance of its own stock. If I were an investor, the fact that AAI is $5 (about 30%) off its 52 week high would be a huge issue for me. AAI is never going to make an offer that is 100% cash, and so the health of its stock is of huge consequence to the long-term investor. How are they going to right the ship? They have almost completely ignored this question
* On a related note, AAI needs to articulate a viable long-term plan for the combined company. We've heard a fairly comprehensive plan for MKE (more on that below), but simultaneously, we know that FL has pulled planes off of business routes at DFW and MDW to add Florida flying, and we know that YX is growing its two focus cities, OMA and MCI. How does all of this fit together? Where does a city like BWI fit into all of this? We haven't heard yet
* What are the hidden costs of the merger? For example, J7 owes the city of Nashville a whole bunch of money, and FL will not be welcome there until this issue is resolved. This one is fairly common knowledge, but what other skeletons are in the closet?
* AAI needs to more honestly address the issue of jobs. In the short term, this merger will result in job losses in Wisconsin. Ordinarily, this wouldn't be a big deal. Mergers have synergies. Some employees are no longer necessary. Unfortunately, under Wisconsin law, this loss of Wisconsin jobs is a valid reason for the BoD of MEH to ask AAI to pay more. AAI only talks about the job gains, but MEH is concerned about job losses
* What will happen to service standards? This isn't about how everyone loves cookies (though I'll admit that every time I fly YX, I try to get 2, and the last time I flew AL, there was a deadheading pilot who slept the whole flight except when the cookies came around). We know that hot cookies and the current YX meals will not exist any longer. Yet, AAI says that they will start using the "best practices" of the current YX. This is a very creative way to say absolutely nothing. What does this mean?
* What place to RJs have in AAI's long term plans? Even the most ardent supporter of FL will concede that the ZW experiment failed. But they want to keep AL and OO around? The feed provided by regional carriers is an important part of the success of the MKE hub, and the addition of seats that comes with reconfigured 712s combined with the loss of this feed would prima facie seem like a recipe for disaster.
* And finally, what is the plan for MKE? We've heard these grand stories of a 350 flight hub. I've detailed in another thread why I don't think this is viable. In many markets, AAI proposes to fill 2 or 3 times the number of seats that AA and UA fill at ORD with about 1/4 the local market and about 1/2 the feed. Chicago is not a particularly high-fare market, so even the argument that low fares will stimulate the market doesn't get us there. I think MKE could probably support what I call "MEM-lite," a 150 daily flight hub of 3 banks. Why does AAI think it can support so much more?
* What if someone mounts a competitive response at MKE? If the merger goes through, there is no way that FL keeps E60 and E61. That leaves NW and CO with 9 gates and about 25 daily flights between them. NW could build a focus city similar to what they currently do at IND with very little trouble, and at IND, they compete successfully with FL AND WN. That spells potential trouble. B6 is looking for a midwest foothold. F9 is beginning to expand more and more outside of DEN. What if one of them enters (or, in the case of F9, grows) MKE? Both offer a better product. Has FL even considered these possibilities?
* And finally, there is the question of customer backlash in Milwaukee. Despite being a native of the upper midwest, I don't understand the loyalties that are present there. I do know that all AAI says is that lower prices will win hearts and minds. What if they are wrong?
I assume AAI has considered all of these issues. If they really want this merger to happen, they need to address them honestly.
Quoting DAYflyer (Reply 7): And if you think it is so easy to do, why did NW fail in it's raid?
YX was there. NW can raid FL much more easily than it can raid YX.
[Edited 2007-05-17 16:53:21]
I can't decide whether I miss the tulip or the bowling shoe more
Airtran seems hellbent on making this happen. I'm not sure it will be of benefit to the employees of YX, their pax, or the people of Milwaukee in the long run. Stay tuned, this looks as if it will drag out a long while.
25 Boeing7E7: It's not E-trade day traders offering advice to shareholders and moving portfolios. Its portfolio managers making recommendations to the shareholders
26 MPDPilot: How do you figure? Yes they have the same planes and relatively complementry route structures, but that is about it. They offer extremely different p
27 Boeing7E7: Excellent points. Also of note, this temporary advantage will be nullified when O'Hare modernization is complete providing a 60% increase in O'Hare's
28 OttoPylit: The funny thing is that Airtran doesn't know how to take a hint. Midwest's employees have made it clear that they don't want to work for a bottom-of-
29 Knope2001: A significant portion of the MEH company stock is now owned by firms looking to make a quick buck. The buyout offer put the stock "in play" and that a
30 Quickmover: The present environment is that MEH is now at $15 and before all this happened it was between $8-9. There is nothing flawed about taking a bird in ha
31 Boeing7E7: The premium has to be sustainable, and it won't be if they take over Midwest. The primary reason carriers don't hammer away at MKE right now is becau
32 JBo: Not sure what you're talking about here, the only outsourced planes in YX are the OO CRJs, and in any event, they along with Skyway, would likely be
33 Cubsrule: http://www.savethecookie.com/ Granted, it's not nearly as well-advertised as DL's efforts were.
34 2175301: I'd like to thank the people who have recognized what is different about Midwest. The product. The reason that NW and others have not been able to aff
35 DAYflyer: Something else of interest in a Baltimore paper today: Late yesterday, Midwest announced a "code share" deal with Northwest, with each airline selling
36 Tedex: Love the analogy... And also, welcome to my respected user list.
37 BigJKU: Why? Airtran will get killed at both MCI and in Wisky. They will simply be another low cost garbage hauler and will open themselves up to lots of com
38 AirTran717: Justify your remarks please. how do you figure they aren't making money?
39 AirTran717: For the good or the bad, Joe Leonard almost always gets what he wants. There must be some merit in all this to pursue so vehemently. I know the man. I
40 Boeing7E7: Do you know how insignificant your profit margins are relative to what it will cost for you to survive against a downturn or Delta's bankrupsty emerg
41 AirTran717: So as to not get my wrist slapped and a little suspension for a few days, I will not comment on Otto's post other than to say... here we go again, wi
42 AirTran717: A leather seat and a cookie. Oh boy!!
43 BigJKU: Great, if he wants to take on a bunch of overhead, planes, people, debt and what not to get access to routes that are not going to fly his airline th
44 Boeing7E7: Better than a sardine can with 4" less pitch, a 3" reduction in seat width and a couple of peanut chuckers.[Edited 2007-05-18 18:29:38]
45 AirTran717: Doesn't affect me any more at all. I work in the medical field now. Making twice what I did at FL. A paycheck away from foreclosure? Come on. Don't b