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Battle For Spirit Airlines Enters Final Stretch

By Dave Simpson

Spirit Airlines Inc <SAVE.N> said that it has postponed a shareholder vote scheduled for Friday 8 July on its $2.4 billion sale to Frontier Group Holdings Inc <ULCC.O> so its board can continue discussions with both Frontier and JetBlue Airways.

Below are the key events of the takeover saga:

Date Development
Feb. 7 Frontier makes a cash-and-stock offer of $25.83/share for Spirit Airlines.
Feb. 8 Lawyers from the U.S. Justice Department say Spirit and Frontier's merger to create the fifth-largest airline in the country would face close scrutiny.
March 10 Several public advocacy groups call on US regulators to block Frontier's bid for Spirit.
April 5 JetBlue makes an unsolicited $3.6 billion, or $33/share, all-cash bid for Spirit.
April 6 JetBlue mounts a vigorous defense of its unsolicited $3.6 billion bid for Spirit, adding that it is "highly confident" of securing regulatory approval.
April 7 Spirit says that it would enter into discussions with JetBlue on its $3.6-billion offer as it could likely lead to a "superior proposal" to the one from Frontier.
May 2 Spirit rejects JetBlue's $33/share offer, saying it had a low likelihood of winning regulatory approval.
May 10 Head of Sun Country Airlines <SNCY.O> throws his backing behind potential merger in the ultra-low-cost airline sector.
May 11 Spirit says it will hold a shareholder meeting on June 10 for a vote on its proposed merger with Frontier.
May 16 JetBlue makes hostile all-cash takeover offer of $30/share and adds it was ready to "negotiate in good faith a consensual transaction at $33".
May 19 Spirit Airlines urges shareholders to reject the hostile offer from JetBlue, saying it was "a cynical attempt to disrupt" its merger with Frontier.
May 31 Proxy advisory firm ISS urges Spirit shareholders to vote against a proposed merger with Frontier.
June 2 Frontier agrees to pay a break-up fee of $250 million in a bid to salvage its $2.9 billion acquisition of Spirit Airlines.
June 3 Shareholder advisory firm Glass Lewis recommends Spirit Airlines investors approve Frontier Group's $2.9 billion takeover bid, saying it was the "best available" at this time.
June 6 JetBlue sweetens its takeover bid for Spirit by offering $31.50 per share in cash, comprising $30 per share at deal close and the prepayment of $1.50 per share of the reverse break-up fee.
June 8 Spirit Airlines delays to June 30 a shareholder meeting to vote on its proposed merger with Frontier.
June 14 Spirit Airlines said it was in talks with JetBlue Airways and has granted JetBlue access to the due diligence information being shared with Frontier Group. Spirit said it was expecting to decide on the proposal by the end of this month.
June 20 JetBlue Airways said it had sweetened its takeover offer for Spirit Airlines to $33.50 per share.
June 24 Frontier bumps up the cash component of the deal by $2 per share to $4.13 per share, prompting Spirit Airlines to urge its shareholders back a deal with its ultra-low-cost rival at a meeting next week.
June 25 ISS urges Spirit shareholders to vote for a proposed merger with Frontier after the carrier sweetened its offer.
June 27 Frontier's Chief Executive Barry Biffle says the revised offer for Spirit will be enough to secure a merger deal with the ultra-low-cost carrier.
June 27 JetBlue ratcheted up its bidding war. Offers a "ticking fee", which would give Spirit shareholders a monthly prepayment of 10 cents per share between January 2023 and the closing of the deal, raising the overall deal value to $34.15 per share.
June 28 ISS says JetBlue's latest offer is "more favorable" but maintains its support for the Frontier deal.
June 28 Spirit rejects JetBlue's sweetened takeover offer and recommends that shareholders vote in favor of a merger with Frontier at a meeting on Thursday.
July 7 Spirit postponed a shareholder vote scheduled for July 8 on its $2.4 billion sale to Frontier so its board can continue discussions with both Frontier and JetBlue. Spirit said it now plans to hold a special meeting on July 15.

Spirit Postpones Frontier Deal Vote, To Continue Talks With Frontier And JetBlue

The above news followed news that Spirit Airlines Inc SAVE.N said that it has postponed a shareholder vote scheduled for Friday 8 July on its $2.4 billion sale to Frontier Group Holdings Inc ULCC.O so its board can continue discussions with both Frontier and JetBlue Airways.

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Reuters first reported the planned delay.

Over the past few months, JetBlue and Frontier, led by influential airline investor Bill Franke, have repeatedly sweentened their bids for Spirit, seeking to create the fifth largest US airline.

The Spirit shareholder vote, which has been delayed twice before, is being pushed back for a third time to give Spirit and JetBlue time to finalize a deal, sources told Reuters, requesting anonymity as the discussions are confidential.

Spirit said it now plans to hold a special meeting on 15 July.

JetBlue CEO Robin Hayes said in a statement the airline was "encouraged by our discussions with Spirit and are hopeful they now recognize that Spirit shareholders have indicated their clear, overwhelming preference for an agreement with JetBlue."

JetBlue submitted a sweetened $3.7 billion all-cash bid last month but Spirit has been reluctant to accept JetBlue's much more financially attractive offer due to concerns that antitrust regulators may reject it, according to the sources.

JetBlue is already facing a lawsuit from the US Justice Department over its partnership with American Airlines AAL.O in the New York and Boston areas.

There is no certainty JetBlue will provide Spirit the necessary assurances on the regulatory front to reach a deal and Frontier, which has already improved its offer, may come back with a new bid, the sources added.

The Frontier deal is also expected to face antitrust scrutiny. But Spirit and some analysts say that deal has a better chance of getting a nod from regulators.

Both bidders view Spirit as an opportunity to expand their domestic footprints and reshape the US airline industry, which is largely dominated by four domestic carriers. An acquisition by either bidder would come at a time when the industry is currently grappling with labor and aircraft shortages.

Last week, Spirit was forced to postpone the shareholder vote until 8 July. The sources said it did not have enough shareholders to back the Frontier deal at the time.

Spirit To Postpone Frontier Deal Vote As JetBlue Talks Progress -Sources

All of the above news followed news that Spirit Airlines Inc SAVE.N will postpone a shareholder vote scheduled for Friday 8 July on its $2.4 billion sale to Frontier Group Holdings Inc ULCC.O so it can continue negotiations about selling itself to JetBlue Airways Corp JBLU.O instead, according to people familiar with the matter.

The Spirit shareholder vote, which has been delayed twice before, is expected to be pushed back by several days to give Spirit and JetBlue time to finalize a deal, the sources said, requesting anonymity as the discussions are confidential.

The delay is a boon for JetBlue, which submitted a sweetened $3.7 billion all-cash bid to acquire Spirit last month. Spirit has been reluctant to accept JetBlue's offer, even though it is financially more attractive than the proposed Frontier deal, because of concerns that antitrust regulators may reject it, according to the sources.

JetBlue is already facing a lawsuit from the U.S. Justice Department over its partnership with American Airlines AAL.O in the New York and Boston areas.

The Frontier deal is also expected to face antitrust scrutiny. But Spirit and some analysts say that deal has a better chance of getting a nod from regulators.

There is no certainty JetBlue will provide Spirit the necessary assurances on the regulatory front to reach a deal and Frontier, which has already improved its offer, may come back with a new bid, the sources added.

Spokespeople for the companies declined to comment.

Spirit has been the target of a bruising takeover battle between Frontier and JetBlue since it first announced a deal with Frontier in February.

Both bidders view Spirit as an opportunity to expand their domestic footprints and reshape the U.S. airline industry, which is largely dominated by four domestic carriers. An acquisition by either bidder would create the fifth largest US airline, at a time when the industry is currently grappling with labor and aircraft shortages.

Last week, Spirit was forced to postpone the shareholder vote until 8 July. The sources said it did not have enough shareholders to back the Frontier deal at the time.

Frontier, led by influential airline investor Bill Franke, and JetBlue have repeatedly tried to outbid each other over the past few months.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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