Spirit delays vote on Frontier merger — again
Editor's Note
We'll have to wait longer to learn the fate of Spirit Airlines.
The Miramar, Florida-based ultra-low-cost carrier late Wednesday announced that a shareholder vote on its proposed merger with Frontier Airlines will be delayed until July 8 — just hours before the meeting was to begin.
It's the second delay for the special shareholder meeting where the vote was to occur, which was originally scheduled for June 10. Technically, Thursday's meeting will still take place, though it will be immediately adjourned. Spirit will continue to accept proxy votes from its shareholders after the adjournment.
No specific reason for the delay was given, except to allow for continuing discussions with Frontier and JetBlue and to solicit more proxy votes.
More: JetBlue vs. Frontier: Who will win the battle over Spirit and why does it matter?
Spirit faces a hostile takeover bid from JetBlue, which just this week made its fifth offer to purchase the airline at $33.50 per share — or about $3.7 billion. That move came after Frontier late last week sweetened its merger proposal for Spirit. Spirit's management and board have unwaveringly supported the proposed tie-up with Frontier since it was announced in February.
More: 'We have a lot of momentum': Frontier's CEO tells TPG he's confident ahead of Spirit merger vote
In a statement, JetBlue signaled that it believes the delay is good news for its bid.
"It's clear that Spirit shareholders have now handed the Spirit Board an undeniable mandate to reach an agreement with JetBlue," the New York-based airline said.
Should shareholders vote in favor of the Frontier merger on July 8, both companies would work together toward winning regulatory approval and closing the transaction, which they hope to do by the end of the year. There would be more uncertainty about the next steps should shareholders vote against the merger. That move would not be an explicit endorsement of JetBlue's proposal — it would just be a vote against the Frontier merger.
Both proposals face regulatory uncertainty, with analysts believing 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.
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