It's "the best care in the air" vs. discount airfares. It's plush leather seats vs. three-across vinyl seats. It's North vs. South. It's warm, freshly baked chocolate chip cookies vs. a bag of peanuts.

Indeed, the proposed acquisition of Midwest Air Group Inc., the Oak Creek-based parent company of Midwest Airlines, by AirTran Holdings Inc., the Orlando, Fla.-based parent company AirTran Airways, would bring together an odd couple, in terms of corporate cultures and business models.

The differences aside, the Midwest Air Group's board of directors ultimately must act on behalf of the company's shareholders. On Wednesday, the Midwest board announced that AirTran's unsolicited offer to acquire the company for $11.25 per share, or $290 million, was not sufficient.

However, AirTran chief executive officer Joseph Leonard declared that he is not about to be deterred and is likely to counter with a sweetened offer to put pressure on Midwest Air Group's board. Leonard planned to turn up the heat by traveling to Milwaukee today to meet with various public officials.

Of Midwest Air Group's 18 million common stock shares outstanding, 42 percent are owned by institutional shareholders, who are not likely to think sentimentally about keeping the company's ownership in the Milwaukee area.

The largest institutional shareholders are Milwaukee-based Heartland Advisors (more than 1.3 million shares), T. Rowe Price Associates (nearly 1.3 million shares) and Dimensional Fund Advisors (1.0 million shares).

Another institutional holders, Milwaukee-based Robert W. Baird & Co. Inc., advised in an equity research note obtained by Small Business Tiems Wednesday that AirTran's initial offer was insufficient.

"While a business combination may have strategic merit, we believe the offer does not provide full value to investors in Midwest," Baird stated

Although the news of the AirTran offer prompted Midwest's stock price to jump $2.02 to $11.10 per share Wednesday, Baird revised upward its target of $13 per share for the stock.

"We believe that strong brand loyalty and customer service should enable Midwest Air Group to continue to differentiate its service and generate better-than-average passenger yields. Management is taking important steps to lower the company's cost structure while preserving the brand loyalty it has established over the years. Given our view that trends are improving, we believe 'Neutral/Speculative Risk' is the appropriate rating for Midwest Air Group but acknowledge the potential upside in a merger scenario," Baird stated.

AirTran has some cash to expend toward an acquisition. In October, the company reported year-to-date net income of $18.8 million, or 20 cents per share, compared with $7.7 million or 9 cents per share, in the same period in 2005.

With its upward trend in earnings, the American airline industry is ripe for consolidations. U.S. Airways has made a hostile takeover bid for Delta Air Lines Inc., and UAL Corp., the parent company of United Airlines is in preliminary negotiations to acquire Continental Airlines Inc.

The mergers of the larger airlines are creating a sort of barbell effect in the industry, with the mega-carriers on one end and the smaller regional carriers on the other end. To survive, mid-market companies such as Midwest Airlines and AirTran will likely need to acquire other smaller regional carriers or risk being acquired by each other to compete with the larger airlines.

Ironically, Midwest Air Group's recent success has made it an attractive takeover target.

The company had been losing money since the 9-11 terrorist attacks. Speaking at a Milwaukee Press Club Newsmaker Luncheon last November, Midwest Air Group president Timothy Hoeksema raised some eyebrows when he predicted his airline would return to profitability in 2006.

Hoeksema's prediction came true.