Law Group Investigates
AirTran And Southwest Airlines Merger
September 28, 2010 - Kendall Law Group, led by former federal judge Joe Kendall, is investigating AirTran Holdings Inc. for shareholders in connection with the proposed acquisition by Southwest Airlines.
securities firm’s investigation seeks to determine whether AirTran and
its Board breached their fiduciary duties by entering into the agreement
without properly shopping for a deal that would provide better value for
On September 27, 2010, the companies announced that they had entered into a definitive merger agreement under which AirTran would be acquired by Southwest in a transaction valued at approximately $1.37 billion.
Under the terms of the agreement, AirTran stockholders will receive a combination of Southwest common stock and cash valued between $7.25 and $7.75, with at least $3.75 in cash, for each share of AirTran/AAI common stock held. According to Thompson/First Call, at least one analyst has set a price target of $11 per share for AirTran stock. Due to these factors, the firm believes the transaction may be undervaluing the company.
Kendall Law Group
was founded by a former federal judge, includes a former United States
Attorney, prosecutors and securities lawyers who are experienced in
complex securities litigation. The firm has been counsel in numerous
merger and acquisition cases nationwide, including some of the largest
transactions in the
reports closing stock price of $12.28 on September 24, 2010, the
transaction values AirTran common stock at $7.69 per share, or
approximately $1.4 billion in the aggregate, including AirTran's
outstanding convertible notes. This represents a premium of 69 percent
over the September 24, 2010 closing price of AirTran stock.
“The agreement has
been unanimously approved by the boards of directors of each company,
and closing is subject to the approval of AirTran stockholders, receipt
of certain regulatory clearances, and fulfillment of customary closing
conditions,” said Southwest Airlines.
said Southwest Airlines.
"Today is an
exciting day for our Employees, our Customers, the communities we serve,
and our Shareholders," said Gary C. Kelly, Chairman, President, and CEO
of Southwest Airlines. "As we approach our 40th Anniversary of providing
exceptional Customer Service at everyday low fares, the acquisition of
AirTran represents a unique opportunity to grow Southwest Airlines'
presence in key markets we don't yet serve and takes a significant step
towards positioning us for future growth.
will significantly expand Southwest Airlines' low-fare service to many
more Customers in many more domestic markets, creating hundreds of
additional low-fare itineraries for the traveling public. Moreover, the
expansion of low fares should generate hundreds of millions in annual
savings to consumers. Based on an economic analysis by Campbell-Hill
Aviation Group, LLP*, Southwest Airlines' more expansive low-fare
service at Atlanta, alone, has the potential to stimulate over two
million new passengers and over $200 million in consumer savings,
Based on current
operations, the combined organization would have nearly 43,000 Employees
and serve more than 100 million Customers annually from more than 100
different airports in the
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