Fate of Spirit Airlines‘Merger with fellow low-cost carriers Frontier Airlines It is growing steadily.
Spirit has postponed the shareholders’ meeting this week. third timeOpens the door to more stories from both frontier and rival suitors JetBlue Airlines.. Each of the latter two delays occurred hours before Spirit shareholders were scheduled to vote for a frontier partnership. This is currently $ 2.6 billion in cash and equity combinations after the frontier. Recently sweetened An offer to stop JetBlue’s progress. JetBlue offers approximately $ 3.7 billion in a full cash acquisition.
Prior to the recently scheduled vote scheduled for Friday morning, Spirit did not have enough votes to approve the frontier deal, according to people familiar with the matter.
Spirit considers JetBlue’s offer to be excellent and will pay Frontier a split fee of over $ 94 million if it closes the original transaction.
Spirit CEO Ted Christie wrote in a note to employees late Thursday after the vote was postponed again: “We will focus on the well-being of the spirit family and end this process for the rest of our lives. We are working hard. ” Spirit declined to comment further on Friday.
JetBlue supported the delay as part of that. Robin Hayes, CEO, said in a statement late Thursday:
Neither JetBlue nor Frontier provided further comments on Friday.
At stake is the opportunity to become the fifth largest airline in the country after the giants. American, delta, United When Southwest.. The merger of Spirit and Frontier Low cost carrier giantJetBlue states that its takeover offer “turbocharges” airline growth, but its services include more equipment and some aircraft’s mint business class.
“Spirit’s board is bent like hell on a contract with Frontier. They never shook,” said Brett Snyder, a former airline manager who now runs the Cranky Flyer travel site. Said. “The challenge is how to get the votes.”
If a frontier deal goes to vote, Spirit’s shareholders Cash and stock transactions.Bank stocks may mean future interests for shareholders Travel rebound Push up the stock price. However, while low-cost carriers such as Spirit and Frontier are less sensitive to the ups and downs of business trips than large airlines, there is the opposite risk in the event of a recession or a slowdown in travel.
JetBlue’s cash offers on hand avoid gambling.
“With a contract with Frontier, you can make money by trusting what happens after the merger. At JetBlue, it looks like this. Money is here.
JetBlue has repeatedly leniented its proposals to Spirit, including raising reverse split fees if regulators block transactions. The airline’s tenacity has put pressure on the frontier, who recently raised its own proposal to match JetBlue’s reverse split rates.
Spirit’s board rejected each of JetBlue’s proposals, arguing that the acquisition would not go through a convocation with the Justice Department. Sue block JetBlue’s unique regional alliance American Airlines Northeastern United States
The Biden administration’s Justice Ministry has vowed to take a tough stance on competition-threatening transactions, even if it envisions a sale. JetBlue, for example, has promised to sell its assets in the Northeastern Spirit to make the proposed acquisition of Spirit more delicious.
But that’s only a concern if the frontier deal dies — and despite the delay in shareholder voting, it may not be, according to aviation analyst and former airline executive Bob Mann. Hmm.
“I think there are more cases where the spirit listens and undoubtedly pays attention to reviews. [JetBlue’s offer] And they may eventually conclude on their own that it doesn’t make sense, “he said.
Even if frontier trading is inadequate in shareholder voting and paves the way for JetBlue, Frontier may be ahead. JetBlue’s plans are a dense, no-frills Airbus aircraft with a seat back screen, larger leg room, and free Wi-Fi.
Whatever JetBlue pays for the spirit is a “down payment,” Mann said. “The integration cost will be billions of dollars in addition and will take years.”
It will leave Frontier as the largest and outstanding no-frills low-cost carrier in the United States when almost everything is becoming more expensive.
