Now that AirTran Holdings Inc. has succeeded in convincing the shareholders of nearly 57 percent of Midwest Air Group Inc.'s stock to tender their shares, a prominent hedge fund says "the time has come" for the Midwest board to give up its opposition and sell the company.
AirTran Holdings, the parent company of AirTran Airways, today announced that it is extending its latest tender offer of $15 per share of Midwest Air Group until June 8. As of the close of business on Wednesday, shareholders had agreed to tender more than 13.9 million shares, or 56.6 percent, of all outstanding shares of Midwest, to Galena Acquisition Corp., a wholly owned subsidiary of AirTran.
"We are extremely pleased with the response we are seeing from Midwest's shareholders, including the largest institutional investors," said Joe Leonard, AirTran Airways' chairman and chief executive officer. "Currently valued, based on recent market prices, at nearly $16 per share, our tender offer has been gaining momentum over the last 30 days, even without the mailing of our proxy materials, which will include the latest version of our offer to exchange as filed with the SEC."
On April 2, AirTran increased its buyout offer for Midwest Air Group to $15 per share for all of the Midwest shares, a total of $389 million.
Octavian Advisors LP, a New York-based hedge fund that has acquired 6.6 percent of Midwest's shares on speculation that the Oak Creek-based company will be sold, put more heat on the Midwest board to sell this morning.
"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," said Richard Hurowitz, chief executive officer Octavian. "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. We do not believe going through a proxy contest at the annual meeting - a contest that Midwest appears likely to lose - is the best way to combine these two great airlines. We believe all shareholders would be quite concerned if the board does not at this point listen to its constituency and abide by its fiduciary duty to open a real dialogue with AirTran. This obligation is even further reinforced by the tremendous benefits a combination offers to the company's employees, customers, and the communities of Milwaukee and Kansas City. The time has come for this transaction."
Still, the board of directors of the parent company of Midwest Airlines is holding steadfast in its opposition to the hostile takeover.
"Nothing has changed as far as control of Midwest Air Group is concerned; no shares have been purchased by AirTran," said Carol Skornicka, senior vice president, general counsel and secretary of Midwest. "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 said several "significant actions" would have to be taken by the Midwest board 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," Skornicka said. "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."
Skornicka said Midwest's board unanimously recommended rejection of AirTran's most recent exchange offer for several reasons, including its belief that the $389 million offer is inadequate and that it does not take into account the long-term value of Midwest's strategic plan.
The dueling propositions will ultimately clash at Midwest's annual meeting of shareholders on June 14, when shareholders will choose between a slate of three company board of director candidates nominated by Midwest and three alternative candidates nominated by AirTran.

Results from a first-time survey of North American business leaders indicate they expect energy prices to continue to rise and plan to invest in energy efficiency measures to help fight rising costs. Despite the growing trend toward sustainability, executives cite a desire to decrease energy expenditures within their organizations as a greater motivator than environmental responsibility.
Those are some of the findings of the research commissioned by Glendale-based Johnson Controls Inc.
The first-ever Johnson Controls Energy Efficiency Indicator research surveyed individuals from a wide range of facilities and locations who were decision-makers for energy management issues within organizations and asked how they were responding to rising energy costs, defined as electricity and natural gas costs.
Johnson Controls plans to repeat the Energy Efficiency Indicator research annually.
Consistent with the rising energy cost forecast, 62 percent say their companies are paying more attention to energy efficiency today than five years ago. As a result, they are acting on it.
Commercial buildings consume about 40 percent of the natural gas and 60 percent of the electricity generated in the United States.
"This survey provides a valuable snapshot of how organizations are reacting to rising energy prices, and I think we're going to see even more attention paid to this in the future," said C. David Myers, president of the Johnson Controls Building Efficiency business. "There's a growing realization of the role commercial and industrial facilities play in energy consumption, and the role they can play in making the economy more energy efficient. Johnson Controls believes that employing effective energy management strategies can help mitigate the impact of those costs and improve our country's energy self-sufficiency."

TDS Telecom Corp. president and chief executive officer Dave Wittwer says he continues to support the cable competition bill now before the Wisconsin Joint Finance Committee and remains convinced it will be passed into law and signed by the governor.
Supporters say the legislation, which would allow traditional telecommunications carriers such as TDS and AT&T Inc. to enter the video entertainment marketplace, would result in more competition and save users up to $150 a year. It would give the state the power to grant statewide franchises to certain video service providers.
Opponents say the bill will reduce funding of local access channels - most of which are funded by franchise revenue-sharing agreements - and lower customer service standards. Cable franchises are now handled by local governments.
"If it is done right, it's a good thing," said Wittwer, speaking at a business luncheon sponsored by WisBusiness.com, Madison Magazine and the Madison Club. WisBusiness.com is a media partner of SBT.

With the help of Brookfield-based Fiserv Inc., the Greensburg State Bank in Greensburg, Kan., is open and functioning after an F5 tornado destroyed much of the small town, the bank's only building and killed 12 people on May 4.
Despite their personal property losses, Greensburg State Bank employees had erected a tent outside the destroyed bank building and reopened by May 6. Later that day, using the Haviland Telephone Company offices and high speed Internet, Fiserv assisted the bank in configuring a salvaged laptop which allowed the bank to transmit electronic debits and credits through the automated clearinghouse (ACH).
The following morning, Fiserv delivered newly configured personal computers which allowed the bank to access all its banking processes and created a secure connection into the Fiserv data centers.
Tom Corns, Greensburg State Bank president, said, "The officers, directors and staff at Greensburg State Bank would like to thank Fiserv and its employees for the exceptional work and outstanding job they did to bring our data processing services back online after a complete loss of building and computer equipment. They had a technical support person come out and help us establish all computer links with Fiserv and our data processing continued without a skip. I think Fiserv has done an outstanding service to this bank and this community."
"The people in Greenburg had lost their homes, their belongings and their town. They needed access to their accounts and their money," said Craig Marvin, president of the Fiserv Des Moines data center. "Disasters are something that we hope never happens, but we do plan for them. We felt honored to be in the position to help."

"Milwaukee's Mental Health System: A Crisis in our Midst" will be the focus of the Milwaukee Press Club's next Newsmaker Luncheon. The event will take place Wednesday, May 30, from noon to 1:30 p.m., at the Newsroom Pub, 137 E. Wells St., in downtown Milwaukee.
The Newsmaker Luncheon panel will include: Martha Rasmus, president of the Mental Health Association of Milwaukee; Robert Rawski, M.D., psychiatrist and clinical instructor at the Medical College of Wisconsin; and Jim Hill, administrator of the Milwaukee County Mental Health Division.
The newsmakers will be interviewed by a panel of local professional journalists to be named later. The public is invited to attend the luncheon, but pre-registration is required, as seating is limited. For additional information, contact Gloria Gappa-Grundman at milwaukeepressclub@gmail.com or call (414) 588-9571.

Nominations for the Mequon-Thiensville Business/Citizen of the Year Awards are being accepted at www.mtchamber.org June 1.
Nomination forms also are available at City Hall, Village Hall, Weyenberg Library, area banks and at the chamber office, 250 S. Main St., Thiensville.
The awards, sponsored by the Mequon-Thiensville Chamber of Commerce, offer the community an opportunity to recognize outstanding local businesses and citizens who make significant contributions to Mequon and Thiensville.
Winners in the "Business of the Year" and "Citizen of the Year" categories will be honored at the Celebrate Your Community Awards Dinner on Sept. 19 at Shully's in Thiensville.

The State of Minnesota has enacted a smoking ban for its bars and restaurants, and the new law is having an immediate impact on establishments along the Wisconsin side of the Mississippi River. A similar ban has been proposed for Wisconsin. For more, read SBT's daily roundup of headlines from newspapers around the state at www.biztimes.com.

Is Milwaukee cool? Well, a college student visiting from Manitowoc sure thinks so. Read more in today's Milwaukee Biz Blog.

The BizTimes Stock Index gained .93 points to close at 193.04 Wednesday, but the majority of local stocks fell in early morning trading today. The largest local decliners this morning were Bucyrus International Inc. (down $1.28 to $66.49) and Gehl Co. (down 86 cents to $28.72). The largest local advancers this morning were Kohl's Corp. 9up $2.04 to $74.00) and Brady Corp. (up 71 cents to $34.17). The BizTimes Stock Index was created by Small Business Times and is monitored by North Shore Bank. The index, which measures the stock values of publicly held companies based in southeastern Wisconsin, is updated daily and can be viewed at www.biztimes.com.

Dan Finley, president of the Milwaukee Public Museum, is moving forward with a plan to save the financially strapped museum.
The plan will include selling the naming rights of the museum to a private entity, Finley said. The plan will be discussed by various interested parties on Monday, Finley said.
Speaking at Leadership Series Breakfast at Concordia University in Mequon today, Finley said the plan, if approved, will give the museum a solid financial foundation for the future.
"I cannot reveal (the number), but if everyone gives, we will be fine," Finley said.
With the plan, the museum's debt of more than $40 million will not be obliterated, but it will be diminished enough so that the museum could then look for a benefactor to donate the rest that is needed, Finley said.
"The name of the Milwaukee Public Museum is for sale," Finley said. "We are not going to make it on public money. What we need to do is restructure our debt, get some paid off, hopefully get wonderful financing and a good donor, and we will change the name of the museum to reflect the generosity of that donor."
For the past six months, the museum board and executive management have met with principal stakeholders, banks, Milwaukee County government officials, philanthropists and representative of Discovery World at Pier Wisconsin to discuss the museum's debt.
"We needed a 'shared pain' proposal, where everyone gives a little bit," Finley said.
Milwaukee County has contributed by guaranteeing 10 years of funding to the museum, he said.
The Lynde and Harry Bradley Foundation recently offered a challenge grant of $5 million to the museum, contingent upon the facility raising another $5 million from private donors, coming to an agreement with Milwaukee County and museum bankers and negotiating new terms of its offer to purchase the adjoining former Discovery World building.
The Milwaukee Public Museum's main focus will be on a capital campaign that will be launched in June, Finley said.
"Then we will do nothing but think about the future, how we can contribute to the community and do wonderful things," Finley said.
Finley said the "St. Peter and The Vatican: Legacy of the Popes" traveling exhibit that was at the museum from February to May of 2006 was a resounding success, and the museum plans to focus to bring in more unique exhibits.
The Milwaukee Public Museum has already signed "Body Worlds" as a featured exhibit next January. The popular traveling exhibit is the work of German anatomy professor Gunther Von Hagen and features plastinated human corpses and organs.
The museum has contract agreements pending for a traveling exhibit devoted to the Titanic and the purchase of the bones of a wooly mammoth that were found in a farmer's field in Kenosha. Finley said the bones will be on display near the front of the museum.
"We have other ideas for what the museum can become, tied to the issues of today," Finley said. "The museum has been a great repository. We have the resources to help us understand where we have been and to find out where we want to go."
Some issues Finley mentioned he would like to tackle in exhibit form at the Milwaukee Public Museum include immigration, global warming and guns in the community.
"We see ourselves as a sort of town hall for future issues," Finley said.
Finley's optimism stands in sharp contrast to the recent history of the museum, when the facility fell short in revenues and the staff tapped into the museum's endowment funds.
"The museum was literally within hours of bouncing payroll checks and going into bankruptcy," Finley said.
The museum's senior leadership was changed, and Terry Gaouette, former chief financial officer, has since been charged with four felony counts, including theft by officer and three counts of fraudulent writings.
Finley recalled that when he came aboard as president in 2005 after leaving his post as Waukesha County Executive, his first week was grim.
"My first few days on the job, the chief financial officer kept coming to me with more bad news," Finley said. "Like anybody else, I assumed this was a remarkably solid institution. It has been an arduous process."
The museum was in even more debt than anyone had thought, causing Finley and his management team to cut 42 percent of the museum staff, equating to about 100 employees. The museum currently has 150 employees, Finley said.
As a result of the cuts, the museum lost its curatorial strength and a few academic people. It will be a while before the museum can afford to hire back individuals of such stature. As a stopgap, Finley hopes to partner with local colleges and universities for joint appointments.

Midwest Air Group Inc., the Oak Creek-based parent company of Midwest Airlines, announced this afternoon it has signed a memorandum of understanding with Northwest Airlines to form a strategic codeshare partnership between the two carriers.

The new partnership will greatly expand the networks of both carriers by adding 250 city pairs and more than 1,000 new flight options for customers. Passengers can book their entire flights on a single ticket, with all segments earning mileage credit in either the Midwest Miles or Northwest WorldPerks frequent flyer programs.

With the partnership, Midwest fired a volley back at AirTran Holdings Inc., which has been engaged in a hostile bid to acquire the Wisconsin airline.

The agreement with Northwest is the next step in the continuing rollout of Midwest's 2007 growth plan. Along with other key elements of the plan, the codeshare agreement is expected to enhance the value of the company for shareholders by providing significant revenue impact as a result of offering customers more ways to easily reach their favorite cities.

"This codeshare is an expansion of the successful reciprocal frequent flyer relationship between Midwest and Northwest that began in May 2006," said Scott Dickson, senior vice president and chief marketing officer of Midwest Air Group. "We're thrilled to expand our partnership with Northwest. This is a great opportunity to provide a wider choice of travel destinations to customers of both airlines."

The agreement is the largest codeshare Midwest has entered into in its 23-year history, Dickson said.

Northwest routes that will include the Midwest Airlines "YX" code are destinations beyond Northwest's hubs at Detroit, Minneapolis/St. Paul and Memphis throughout the United States and Canada. Midwest will also place its code on Northwest flights from Indianapolis, a Northwest focus city. Additionally, Midwest's code will appear on a number of Northwest-operated flights to Hawaii and Alaska.

Routes operated by Midwest Airlines that will carry the "NW" Northwest code are flights that connect at Midwest's Milwaukee and Kansas City hubs, as well as Omaha - a Midwest focus city. Northwest will also codeshare on Midwest Airlines-operated flights between Milwaukee and Kansas City to Atlanta, Boston, Hartford, Los Angeles and San Francisco that connect to the Northwest/KLM trans-Atlantic network and trans-Pacific network.

"Northwest Airlines looks forward to welcoming Midwest Airlines customers on codeshare flights in the near future. The expansion of our partnership with Midwest Airlines will provide customers of both carriers with more convenient travel options to destinations throughout the country and the world," said Nathaniel Pieper, Northwest's vice president of alliances.

The codeshare partnership is expected to begin this summer, pending execution of definitive agreements. Complete details on codeshare destinations and fares will be announced at a later date.

U.S. Sen. Herb Kohl (D-Wis.) applauded the announcement of the partnership between Midwest and Minnesota-based Northwest.

In March, Kohl held a Senate hearing regarding the AirTran's hostile takeover bid for Midwest, during which he urged the chief antitrust official at the Department of Justice to conduct a second review of merger terms should the deal move forward. Kohl is the chairman of the Senate Judiciary Committee's Antitrust, Competition Policy and Consumer Rights Subcommittee.

"Today's announcement is welcome news for the thousands of frequent flyers that value Midwest's stellar service and have been cool to the idea of Airtran's takeover bid," Kohl said. "By partnering with Northwest, our hometown airline has found a way to dramatically expand their route offerings to their customers, while strengthening their company's position in an increasingly competitive industry. This move is a win, win for everyone."

In January, Kohl wrote to Joseph Leonard, chief executive officer of Orlando, Fla.-based AirTran, saying, "As chairman of the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights, I and others on the panel are concerned about consolidation in the airline industry. Further consolidation could lead to higher prices, lower quality of service, and loss of competitive choices.  Should AirTran pursue its offer to acquire Midwest Airlines, you can expect that the Antitrust Subcommittee will examine this proposed acquisition very carefully to ensure this transaction does not harm the interests of Wisconsin consumers or airline competition generally. We will also engage in close oversight over the Justice Department and the Department of Transportation as they review this transaction. You can expect me to oppose any transaction that will risk substantial harm to the interests of Wisconsin consumers, airline competition in Wisconsin or the Milwaukee economy."