Spirit on Wednesday said it would delay the vote until July 27 and reiterated its preference for being bought by fellow discount airline Frontier instead of
JetBlue Airways Corp.
, a deal which Spirit has said faces significant regulatory risks.
The vote, most recently scheduled for July 15, has now been pushed back four times.
Spirit said it would continue discussions with both Frontier and JetBlue, which has been bidding against Frontier to buy Spirit.
JetBlue Chief Executive
said Wednesday that the company is ready to enter into a binding agreement with Spirit “as soon as practicable and at the latest, immediately following Spirit shareholders voting against the Frontier transaction on July 27.” He added that Spirit shareholders have made “increasingly public acknowledgements that JetBlue’s latest proposal is clearly superior in every respect.”
Shares of JetBlue traded more than 4% lower at $7.92 around midday. Shares of Spirit and Frontier both fell about 1%.
on Sunday asked Spirit to delay the vote to allow Frontier more time to persuade Spirit shareholders to back the deal. Based on data from last week, he said, Frontier remains “very far” from obtaining enough shareholder votes to approve the deal.
Mr. Biffle also asked Spirit’s board to publicly reaffirm its commitment to its deal and said that the company’s latest offer for Spirit late last month was its “last, best and final” proposal. Spirit has been the subject of a tug of war between Frontier and JetBlue that has dragged on for months, and Mr. Biffle’s letter came as talks between Spirit and JetBlue have progressed, The Wall Street Journal reported.
JetBlue is seeking to upend a merger between Spirit and Frontier that was first announced in February. JetBlue is currently offering about $3.7 billion in cash for Spirit.
Spirit has resisted JetBlue’s advances and encouraged its investors to instead approve Frontier’s cash-and-stock offer, now worth roughly $2.7 billion, arguing that the Frontier deal would be better for shareholders in the long run and stood a greater chance of clearing regulatory hurdles.
Either deal would create the fifth-largest U.S. airline. While JetBlue’s offer is higher, Frontier and Spirit have argued that antitrust regulators would likely block it and that investors would see little of that money. JetBlue has countered that both deals would face close regulatory scrutiny, with similar levels of risk, making its higher price tag more compelling.
Major proxy advisory firms backed the Frontier merger, but investors haven’t been won over, with a swath of holders, including some large investors, resistant to that deal, The Journal reported. Mr. Biffle said Frontier needs more time to stand a chance of persuading them.
“We still remain very far from obtaining approval from Spirit stockholders,” Mr. Biffle wrote in the Sunday letter to Spirit CEO
its general counsel.
Mr. Biffle also said that if Spirit has decided it wants to pursue a deal with JetBlue, Frontier would consider waiving its rights to match JetBlue’s bid.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8