AirTran Holdings Inc said it had until Monday to decide whether to extend its hostile bid for Midwest Air Group should it fail by its deadline of midnight on Friday.
The parent of low-cost carrier AirTran Airways has offered just under $380 million, based on current share prices, for Midwest, arguing that a merger would bolster its route network and create a more competitive airline. For months, Midwest has opposed the AirTran offer. But its resistance weakened when shareholders elected three board members nominated by AirTran.
Midwest said last month it would begin talks with AirTran and other potential buyers, but it still believed it has more value in the long term as a stand-alone company.
AirTran said on Friday that Midwest shareholder support has increased for its plan. At the close of business on Friday, shareholders agreed to tender about 15.5 million shares of Midwest to AirTran's Galena Acquisition Corp.
That represents 62.7 percent of all Midwest's outstanding shares, AirTran said, a 3.2 percentage-point increase over the number of shares tendered at the expiration of the last tender offer, which expired on June 8.
The deadline for AirTran's latest offer was midnight EDT, or 0400 GMT on Saturday. The Wall Street Journal reported on Friday that Northwest Airlines Corp was considering partnering as a passive investor with one of the parties now weighing a bid for Milwaukee-based Midwest. Citing a person with knowledge of the situation, the newspaper said Northwest hoped to protect a marketing agreement it signed recently with Midwest.
A Midwest spokeswoman said negotiations were ongoing with multiple parties, but declined to comment on specifics. Northwest declined to comment. Midwest's nine-member board has formed a committee to explore strategic and financial alternatives.
The committee had planned to hold talks with AirTran and other interested parties. The airline has declined to identify the other parties. Shares of AirTran fell 32 cents to close at $10.70 on the New York Stock Exchange. Midwest shares fell 29 cents to $14.23 on the American Stock Exchange.