Spirit Airlines Delays Shareholder Vote as It Considers Frontier, JetBlue Offers
Spirit Airlines Inc.
SAVE -0.75%
has postponed a planned stockholder meeting on its proposed merger with Frontier as it weighs a competing bid from JetBlue.
Spirit on Wednesday said it would push back the meeting scheduled for Friday to June 30.
Spirit said it still recommends that its shareholders adopt the merger with Frontier but announced the delay to continue discussions with the two bidders, as well as with its own shareholders.
Spirit has been pushing ahead with the sale to
Frontier Group Holdings Inc.,
ULCC -3.55%
a rival low-cost carrier, which agreed in February to buy Spirit in a cash-and-stock deal originally valued at $2.9 billion.
In May,
JetBlue Airways Corp.
JBLU -2.43%
launched a hostile takeover after Spirit rejected JetBlue’s $3.6 billion bid, appealing to shareholders in hopes of pressuring Spirit management to reopen talks.
JetBlue’s latest attempt to sweeten its original $30-a-share offer involved raising the breakup fee to appease concerns that the deal could be blocked by regulators, as well as paying a special dividend of $164 million up front once shareholders approved its bid. The move effectively raised its total offer to $31.50 a share, or $3.4 billion.
Frontier didn’t counter the latest offer from JetBlue.
William Franke,
Frontier’s chairman, said that the company believes it has made a fair offer and that there is a high chance that regulators would block a merger between JetBlue and Spirit.
Regulators have taken an aggressive stance on antitrust enforcement under the Biden administration. JetBlue has said both its deal and Frontier’s face similar levels of risk but JetBlue’s higher breakup fee offers shareholders more protection.
JetBlue is pursuing Spirit to supercharge its own growth, giving it access to Spirit’s pilots, jets and deep Airbus SE order book. JetBlue Chief Executive
Robin Hayes
said this week that the additions would accelerate the company’s growth plans by roughly seven years, taking its market share from about 5% of the U.S. to around 8%, posing stronger competition to the four airlines that dominate U.S. travel.
Corrections & Amplifications
JetBlue’s latest offer effectively raised the total value for Spirit to $3.4 billion. An earlier version of this article incorrectly said the value was raised to $34 billion. (Corrected on June 8)
Write to Dean Seal at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Spirit Airlines Inc.
SAVE -0.75%
has postponed a planned stockholder meeting on its proposed merger with Frontier as it weighs a competing bid from JetBlue.
Spirit on Wednesday said it would push back the meeting scheduled for Friday to June 30.
Spirit said it still recommends that its shareholders adopt the merger with Frontier but announced the delay to continue discussions with the two bidders, as well as with its own shareholders.
Spirit has been pushing ahead with the sale to
Frontier Group Holdings Inc.,
ULCC -3.55%
a rival low-cost carrier, which agreed in February to buy Spirit in a cash-and-stock deal originally valued at $2.9 billion.
In May,
JetBlue Airways Corp.
JBLU -2.43%
launched a hostile takeover after Spirit rejected JetBlue’s $3.6 billion bid, appealing to shareholders in hopes of pressuring Spirit management to reopen talks.
JetBlue’s latest attempt to sweeten its original $30-a-share offer involved raising the breakup fee to appease concerns that the deal could be blocked by regulators, as well as paying a special dividend of $164 million up front once shareholders approved its bid. The move effectively raised its total offer to $31.50 a share, or $3.4 billion.
Frontier didn’t counter the latest offer from JetBlue.
William Franke,
Frontier’s chairman, said that the company believes it has made a fair offer and that there is a high chance that regulators would block a merger between JetBlue and Spirit.
Regulators have taken an aggressive stance on antitrust enforcement under the Biden administration. JetBlue has said both its deal and Frontier’s face similar levels of risk but JetBlue’s higher breakup fee offers shareholders more protection.
JetBlue is pursuing Spirit to supercharge its own growth, giving it access to Spirit’s pilots, jets and deep Airbus SE order book. JetBlue Chief Executive
Robin Hayes
said this week that the additions would accelerate the company’s growth plans by roughly seven years, taking its market share from about 5% of the U.S. to around 8%, posing stronger competition to the four airlines that dominate U.S. travel.
Corrections & Amplifications
JetBlue’s latest offer effectively raised the total value for Spirit to $3.4 billion. An earlier version of this article incorrectly said the value was raised to $34 billion. (Corrected on June 8)
Write to Dean Seal at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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