Spirit shareholders to finally vote on Frontier deal clouded by rival JetBlue bid

FAN Editor

A Frontier Airlines plane near a Spirit Airlines plane at the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Spirit Airlines shareholders are scheduled to finally vote on a planned tie-up with Frontier Airlines on Wednesday, a deal that has been on the rocks following a rival bid from JetBlue Airways this spring.

Spirit postponed the vote four times as it struggled to gather enough shareholder support for the Frontier merger, which the carriers first announced in February.

Frontier told Spirit earlier this month that its latest sweetened cash-and-stock offer was its “best and final” bid. But Spirit still lacks stockholder support for the deal, according to a person familiar with the matter.

The vote is scheduled for 11 a.m. ET.

A rejection of the Frontier deal would be a blow to the discount carriers that planned to combine forces into a budget behemoth and the country’s fifth-largest carrier.

Spirit shareholders will vote only on the Spirit-Frontier transaction, and not on the rival bid by JetBlue, which spent weeks urging shareholders to turn the Frontier deal down.

The vote could clear the way for Spirit to potentially strike a deal with JetBlue, which is seeking to buy the budget airline outright and refurbish its planes in JetBlue style, featuring seatback screens and more legroom. Talks are ongoing, according to a person familiar with the negotiations, but it’s still possible they fall apart.

Spirit’s board has repeatedly rebuffed JetBlue’s advances, arguing that it was unlikely that regulators would approve the deal.

It is possible that neither deal gets done. Both transactions would face a high hurdle for the Justice Department’s blessing because the Biden administration has vowed to crack down on consolidation.

Executives for all three airlines said their preferred deal would help them grow quickly and better compete with the top four U.S. carriers — American, Delta, United and Southwest — which control about three-quarters of the domestic market.

Spirit, however, has raised concerns about a JetBlue takeover because of the New York-based carrier’s alliance with American in the Northeast, a partnership the Justice Department last year sued to undo.

On Friday, Frontier Airlines moved up its second-quarter earnings release and conference call to 4:30 p.m. Wednesday, shortly after Spirit’s meeting. It had been previously scheduled for Thursday.

Free America Network Articles

Leave a Reply

Next Post

Big pink diamond discovered in Angola, largest in 300 years

JOHANNESBURG — A big pink diamond of 170 carats has been discovered in Angola and is claimed to be the largest such gemstone found in 300 years. Called the “Lulo Rose,” the diamond was found at the Lulo alluvial diamond mine, the mine’s owner, the Lucapa Diamond Company, announced Wednesday […]