AirTran raises Midwest bid to $345 million

AirTran raises Midwest bid to $345 million
Thu Jan 11, 2007 5:47 AM ET

NEW YORK, Jan 11 (Reuters) - AirTran Holdings Inc. <AAI.N> raised its offer for Midwest Air Group Inc. on Thursday to $345 million in cash and common stock.

AirTran offered to pay $13.25 per Midwest share, including $6.625 in cash and 0.05884 shares of the airline's common stock.

This represents a premium of 61 percent over the 30-day average closing price of Midwest common stock at the time of AirTran's initial $290 million proposal.

Midwest said on Wednesday that it will add routes and replace its fleet as it tries to convince investors that it should stay independent.

It rejected an unexpected $290 million offer by AirTran last month, saying it significantly undervalued Midwest.

AirTran has said that the combination would create a low-cost airline with revenue of about $3 billion in 2007 and generate more than $60 million in estimated cost savings.