Spirit delays merger vote to continue talks with Frontier, JetBlue.
(credits: Google)
Spirit Airlines postpones shareholder vote on proposed merger with Frontier.
Vote was originally set for June 10 but was postponed for the same reasons.
Both airlines increased their offers in the build up to the vote.
In order to further discuss options with Frontier Airlines and competing bidder JetBlue Airways, Spirit Airlines postponed the shareholder vote on its proposed merger with Frontier Airlines to July 8 hours before a meeting set for Thursday.
The vote on Spirit’s proposed merger with Frontier has been postponed twice, prolonging the most bitter competition for a U.S. airline in recent memory.
Voting on Thursday was initially set for June 10 but was postponed for the same reasons.
In the week leading up to the scheduled vote, both Frontier and JetBlue increased their offers.
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According to Henry Harteveldt, head of Atmosphere Research Group and travel industry consultant, “Spirit would not have postponed tomorrow’s meeting if they felt they had the votes.” On whether or not that is the case, Spirit made no remark.
JetBlue CEO Robin Hayes stated in a statement later on Wednesday, “We commend the Spirit Board for listening to their shareholders, who plainly were not supportive of the Frontier transaction, and adjourning the Special Meeting.
The Spirit Board now has an unquestionable mandate from Spirit shareholders to reach a deal with JetBlue, it is obvious.
Harteveldt continued, “This is like the conclusion of a soap opera episode.
In February, Frontier and Spirit originally declared their intention to unite. JetBlue made an unexpected all-cash offer for Spirit in April, but Spirit’s board has consistently rejected JetBlue’s proposals, claiming that a purchase by JetBlue wouldn’t be approved by authorities.
Either combination would result in the fifth-largest carrier in the US.
As the airlines fought it out for shareholder support before the vote, JetBlue hit back at Spirit, accusing it of not negotiating in good faith. This sparked a verbal spat between the two airlines.
Concerning the delayed vote, Frontier made no immediate response.
In after-hours trading, Spirit stock increased by around 2%, while Frontier’s stock increased by more than 1% and JetBlue’s stock decreased by 1%.
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