Spirit Airlines has decided to postpone its scheduled shareholder meeting to Thursday, June 30 to give itself time to discuss whether to merge with JetBlue or Frontier. Spirit shareholders were set to vote on Frontier’s offer at the shareholder meeting on Friday.
In a statement announcing the delayed vote, Spirit said it remained bound by the terms and agreement of the merger agreement with Frontier and that its board was working through JetBlue’s “unsolicited offer” to determine whether or not it was actually “superior” as JetBlue claims.
The announcement came after JetBlue sweetened its deal to buy Spirit, committing an extra $150 million to Spirit’s shareholders if the deal doesn’t close due to regulatory reasons. That is $100 million more than what Frontier would offer if its proposal is denied for similar reasons. At the time, JetBlue CEO Robin Hayes said, “Clearly, Frontier only agreed to provide a reverse break-up fee and divestiture commitments because it was clear that your stockholders would vote down the inferior Frontier transaction.”
However, Spirit has repeatedly warned JetBlue that its offer would attract antitrust scrutiny for being anti-competitive and would be unlikely to close.
Though Spirit and Frontier announced plans to merge in February, JetBlue decided it wanted Spirit for itself and launched a protracted campaign with a series of offers to win over Spirit shareholders.
After JetBlue filed a tender offer in May, Spirit urged its shareholders to reject it over the Frontier bid. At the time, Mac Gardner, chairman of the board of directors for Spirit Airlines, said, “We believe the combination of the two [ultra-low-cost carriers] (Spirit and Frontier) is the best way to deliver maximum value to Spirit stockholders.”
A lot is at stake—either combination would create the fifth largest U.S. airline, putting it in a position to compete with major airlines: United, American, Delta, and Southwest.
