Spirit Airlines Inc.
will again postpone a shareholder vote on a merger with
Frontier Group Holdings Inc.
as the carrier holds deal talks with Frontier and rival suitor Jetblue Airways Corp., the company said Thursday.
The delay to July 15 is the third time Spirit has put off the shareholder referendum on its planned sale to Frontier, which was first announced in February. The vote had initially been scheduled for June 10, but was pushed back to June 30. That vote was called off last week the evening before the vote—and pushed to July 8.
As votes came ahead of last week’s planned vote, it looked like it would be difficult for the Frontier deal to gain approval by shareholders, The Wall Street Journal reported. JetBlue Chief Executive
said at the time that investors had handed the Spirit board an “undeniable mandate” to reach an agreement with JetBlue.
Spirit and JetBlue spent much of this week negotiating new terms and could reach an agreement as soon as next week, assuming talks don’t fall apart, according to people familiar with the matter. There are no guarantees they will, and Frontier would have an opportunity to alter its offer should they do so.
In pursuit of spirit airlines
Mr. Hayes said in a statement Thursday that JetBlue had been encouraged by its recent discussions with Spirit. Frontier didn’t immediately comment Thursday.
JetBlue sought to upend a planned merger between Spirit and Frontier, two discount airlines, when it swooped in with a competing all-cash offer in the spring. The bidding war escalated in recent weeks as Frontier and JetBlue sought to one-up each other, bolstering the breakup fees they would be willing to pay if regulators blocked the deal and sweetening offers with promises of immediate cash payments. The airlines also have traded allegations that the other side has made misleading claims.
JetBlue’s offer comes to about $3.7 billion, while Frontier’s stock-and-cash bid is worth roughly $2.6 billion at Thursday’s closing share price. Either deal would result in the creation of the fifth-largest U.S. airline.
Frontier shares fell 0.6% in after hours trading, while shares of Spirit rose 0.8% and JetBlue shares were flat.
Despite JetBlue’s higher offer, Spirit had consistently rebuffed its advances, arguing that the Frontier deal has a better chance of passing muster with regulators and would be better for investors in the long run as the industry recovers from the pandemic.
Spirit and Frontier had said they thought a merger with JetBlue had little chance of being approved by antitrust authorities, particularly because the Justice Department is already suing to block a partnership between JetBlue and
American Airlines Group Inc.
JetBlue had countered that the partnership wouldn’t get in the way of its ability to buy Spirit, and that Spirit and Frontier had overhyped the risk of a JetBlue merger while playing down the potential scrutiny their own deal could face.
Write to Alison Sider at [email protected] and Cara Lombardo at [email protected]
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Appeared in the July 8, 2022, print edition as ‘Spirit Again Puts Off Voting On Deal.’