Spirit Airlines postpones shareholder meeting on Frontier deal as merger talks with JetBlue continue
Spirit Airlines postponed its shareholder meeting to June 30
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Spirit Airlines Inc. postponed its Friday shareholder meeting to vote on the proposed merger agreement with Frontier Group Holdings just days after JetBlue upped its offer.
The budget carrier announced Wednesday that the meeting was postponed to June 30 "to allow the Spirit Board of Directors to continue discussions with Spirit stockholders, Frontier and JetBlue Airways Corporation."
On Monday, JetBlue submitted an "improved superior proposal" that included a $350 million break-up fee, up from its previous offer of $150 million, which would be payable to Spirit shareholders if the deal flops.
The revised offer comes after Spirit’s board already rejected JetBlue's original $3.6 billion bid in early May, determining it was not a superior proposal to its previous agreement to merge with Frontier Airlines.
A Frontier Airlines airplane taxis past a Spirit Airlines aircraft at Indianapolis International Airport in Indianapolis, Indiana, U.S., on Monday, Feb. 7, 2022. (Photographer: Luke Sharrett/Bloomberg via Getty Images / Getty Images)
Shortly after, Spirit Airlines' board of directors recommended that its shareholders reject JetBlue's $30 per share tender offer, arguing the takeover bid "has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders."
SPIRIT SNUBS JETBLUE'S $3.6B TAKEOVER BID, PREFERS FRONTIER
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JBLU | JETBLUE AIRWAYS CORP. | 6.49 | -0.57 | -8.14% |
| SAVE | SPIRIT AIRLINES INC. | 1.08 | -0.24 | -18.06% |
| ULCC | FRONTIER GROUP HOLDINGS | 5.62 | -1.18 | -17.35% |
The budget carrier said Wednesday that it "remains bound by the terms of the merger agreement with Frontier, and Spirit's Board has not determined that either JetBlue's unsolicited tender offer or its updated proposal received on June 6 constitutes a Superior Proposal as defined in the merger agreement with Frontier."
Sprit said it would review JetBlue's updated proposal, although its board of directors "has made no change to its recommendation that Spirit stockholders adopt the merger agreement with Frontier."
A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images / Getty Images)
Frontier has said its deal with Spirit is expected to "drive enhanced value for shareholders of both companies" and add "10,000 direct jobs and thousands of additional jobs at the companies’ business partners by 2026."
Similarly, JetBlue is also arguing that "combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for Crewmembers and Team Members, and more value for stockholders."
FOX Business' Lucas Manfredi contributed to this report.