The most enthusiastic airline battle in recent years Set to come to mind on Thursday when Spirit Airlines‘Shareholders were planning to vote for partnerships with other discount carriers Frontier Airlines Rival suitor JetBlue Airlines A circle with an increasingly sweet takeover bid.
But for hours more, the spirit Delayed voting Until July 8, the most fierce battle for US airlines could be extended for years, further pushing up the prices of low-cost carriers.
Spirit repeatedly rejected SweetA full cash bid from JetBlue claims that such acquisitions do not go through regulatory consultations and is sticking to plans to combine-Sweet Cash and Equity Trading Combined with Frontier, First publication During February.
Jetblue surprise The full cash bid in April sparked a dispute over the spirit of last month. Hostile..
When Spirit shareholders vote in favor of a partnership with Frontier, the career Cheap airline giant.. The two airlines share a similar business model of low fares and fares for almost everything else, from seat selection to carry-on baggage.
Fort Lauderdale, Fort Lauderdale, Florida, May 16, 2022-Frontier Airlines plane near Spirit Airlines plane at Hollywood International Airport.
Joe Ladle | Getty Images
Shareholders vote against the deal, opening the door to JetBlue’s acquisition. This transforms the yellow spirit plane into a JetBlue-like one, including a seatback screen and a cabin with wider feet.
“”JetBlue doesn’t have many options “To achieve a gradual change in growth, and that explains why JetBlue pursued this deal so enthusiastically,” said Samuel Engel, an ICF aviation consultant.
JetBlue and Frontier each argue that the proposed deal is key to future growth, making them more competitive with major US airlines and providing quick access to Airbus narrow-body aircraft and pilots. I am.
Both transactions create the fifth largest airline in the United States.
At the end of Monday, JetBlue said it Increase Reverse split fee if regulatory authorities do not approve JetBlue’s acquisition of Spirit from $ 350 million to $ 400 million. We also increased the prepaid amount from $ 1.50 to $ 2.50 per share and added a monthly payment of 10 cents per share to shareholders starting next year until the transaction is completed or closed.
JetBlue previously proposed selling some assets in a crowded market to alleviate antitrust concerns, American Airlines In the northeastern United States, the spirit calls it a challenge to the deal.
For JetBlue’s latest offer, Frontier raised the cash portion of the offer by $ 2 per share to $ 4.13 late Friday and raised the reverse split fee to $ 350 million to match JetBlue’s then offer. It was done later.
Spirit is sticking to the frontier contract. CEO Ted Christie called Frontier’s offer “very compelling” on Tuesday, and the airline wants to focus our efforts on convincing shareholders that “it’s right.” “.
“JetBlue’s enhancements may be sufficient to offset the potential benefits of the Frontier merger,” said Tuesday’s agency institute shareholder service, but for a short time. Before the vote, he said he did not want to change the recommendation in favor of the deal in.
spirit Before Delayed Voting from June 10 to continue negotiations between Frontier and JetBlue.
War of words
JetBlue has argued for weeks that Spirit’s board hasn’t negotiated in good faith or fully considered its offer. He has repeatedly urged low-cost carrier shareholders to vote against Frontier Airlines’ transactions.
“The Spirit Board consistently ignores or rejects JetBlue’s involvement until it faces a certain defeat on the day of its initial shareholders’ meeting, after which it pretends to be JetBlue’s involvement and its poor corporate. We tried to avoid widespread awareness of governance, “JetBlue said. Wednesday’s letter once again urged Spirit shareholders to vote against the frontier deal.
Spirit repeatedly denies allegations that it is not in good faith with JetBlue.
“Our board of directors [the Frontier merger] It is the most economically and strategically compelling path for the Spirit and is likely to be closed. “
All three carriers exchanged heated words as they were trying to acquire Spirit shareholders before the shareholder vote.
JetBlue wrote to Spirit’s shareholders late Monday detailing its latest sweetened bid, accusing Spirit of making “misunderstandings” of allegations of antitrust law.
“JetBlue’s acquisition of Spirit will lead to a deadlock. The fact that money, rampage and turns remain the same,” Frontier said in a long news release on Tuesday.
The high drama is already coming from-Linking An industry that hasn’t seen major airline transactions since JetBlue lost 2016 Alaska Airlines For Virgin America.
“This is more like a summer pot boiler than any messy novel,” said Henry Hartebert, a former airline manager and president of the Atmospheric Research Group.
High regulatory standards
Both combinations of airlines will face strict regulatory scrutiny from the Justice Department after President Joe Biden made it. Ensuring competition Priority.
In a speech in Chicago in April, Assistant Attorney Jonathan Kanter said, “Our obligation is to file a lawsuit unless the remedies completely prevent or curb the breach, and in reconciliation. No. It is a well-known fact that many reconciliations cannot sustain competition. “
Last year’s Ministry of Justice Proceeded to undo JetBlue and American partnership. The trial date is set to late September.
Frontier argues that spirit trading is likely to go through a rally, especially because of growing concerns. High inflation.. Both Frontier and JetBlue say their proposed deal means lower fares for consumers.
“In a world where everyone is worried about inflation and American families and is sandwiched between everything American consumers buy, it’s what consumers want to offer low-priced options. I think, “said in an interview with Frontier CEO Barry Biffle. “In the end, we believe that regulators will one day see it as well.”
