Spirit pushes merger vote back for fourth time as Frontier deal looks shaky
The merger deal between Frontier Airlines and Spirit Airlines looks like it could be in jeopardy.
A fourth delay to the shareholder vote was announced Wednesday after Frontier sent a letter to Spirit earlier this week acknowledging difficulties in gaining approval for the deal and asking for the delay. The vote, at a special shareholder's meeting, will now take place on July 27, though there's been a precedent for delays.
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"We still remain very far from obtaining approval from Spirit stockholders based on the proxy data we received as of July 8, 2022," Frontier CEO Barry Biffle wrote on Sunday to Spirit CEO Ted Christie and senior vice president Thomas Canfield.
Spirit's shareholders must choose between voting to accept a merger deal with Frontier that was announced in February or voting against it — an implicit seal of approval for a competing deal to acquire the ultra-low-cost carrier by JetBlue.
JetBlue's offer is for $33.50 per share, valuing the company at about $3.7 billion — significantly more than the merger deal with Frontier. Should Spirit back out of its merger agreement with Frontier, it would owe the company $94.2 million.
Separately, on Tuesday, one of Spirit's institutional shareholders sent a letter to board chairman Mac Gardner urging the airline to abandon the Frontier merger and to accept JetBlue's proposal.
Read More: JetBlue vs. Frontier: Who will win the battle over Spirit and why does it matter?
"[Spirit]’s Board still refuses to recognize the superiority of the JetBlue bid and continues to recommend [Spirit] shareholders vote for the economically inferior Frontier Merger proposal," Discovery Capital Management wrote. Discovery owns about 1.4% of Spirit's shares.
Regardless of how shareholders vote, both proposals face regulatory uncertainty.
Analysts believe that the Frontier merger would more likely be approved by the Department of Justice’s antitrust division than the JetBlue acquisition offer. JetBlue has offered to divest assets in the Northeast, where it currently cooperates in a strategic partnership with American Airlines. Both proposals come with reverse breakup fees payable to Spirit in the event regulators block the deal: $450 million if the JetBlue deal is blocked and $350 million if the Frontier deal is blocked.
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| 3X | Earn 3X Miles on Delta purchases and purchases made directly with hotels. |
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Build your loyalty to Delta by applying for the carrier's mid-tier card option, the Delta SkyMiles Platinum card. The annual fee is quickly recouped by the card's travel perks, such as an application credit to Global Entry or TSA Precheck, annual companion certificate and so much more. Plus you can fast-track to elite status simply through card spend.Pros
- Earn bonus Medallion® Qualification Miles (MQMs) and an Medallion Qualifying Dollar (MQD) waiver when you hit specific spending thresholds with your card within a calendar year
- Receive a Domestic Main Cabin round-trip companion certificate each year
- Statement credit for TSA PreCheck/Global Entry fee (up to $100)
- First checked bag free
Cons
- Doesn't make sense if you don't fly Delta
- SkyMiles aren't the most valuable airline currency
- Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights. Plus enjoy Main Cabin 1 Priority Boarding and settle into your seat sooner.
- New: Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Mile on all other eligible purchases.
- Enjoy a per-visit rate of $50 per person for Card Members and up to two guests to enter the Delta Sky Club when traveling on a Delta flight.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees