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Spirit Airlines To Delay Vote On Frontier Deal For Fourth Time

By Dave Simpson

Takeover target Spirit Airlines Inc SAVE.N plans to delay a shareholder vote on its sale to Frontier Group Holdings Inc ULCC.O for the fourth time, as both carriers struggle to gather enough support for the deal.

Details

Spirit intends to push the special meeting to 27 July from 15 July, it said on Wednesday 13 July, two days after Frontier requested it to defer the vote on the deal that could create the fifth-largest US airline.

The ultra-low-cost carrier has been at the center of a heated takeover battle between Frontier and JetBlue Airways Corp JBLU.O since it first announced a deal with Frontier in February.

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Though JetBlue's $3.7 billion offer is higher, Spirit has repeatedly touted Frontier's $2.7 billion bid, citing higher long-term benefits and less regulatory risks than a potential deal with JetBlue.

Still, Spirit said on Wednesday that discussions with JetBlue would continue.

"We remain encouraged by the significant progress made in our ongoing discussions with Spirit," JetBlue chief executive Robin Hayes said in a statement.

Frontier chief executive Barry Biffle has said the airline remains a long way away from obtaining requisite support for the deal, as more shareholders come out in support of the JetBlue bid.

On Tuesday 12 July, Spirit shareholder Discovery Capital Management LLC became its second major shareholder to publicly back a deal with JetBlue.

Spirit and Frontier shares were down approximately1%, while shares of JetBlue dropped approximately 3% as surging inflation hit US stocks. .N

TIMELINE-Battle For Spirit Airlines Enters Final Stretch

The above news followed news that Spirit Airlines Inc <SAVE.N> said that it intends to delay the shareholder vote on its merger deal with Frontier Group Holdings Inc <ULCC.O> to 27 July 27 as Frontier seeks more time to drum up proxy support for its buyout bid.

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 U.S. 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.
July 11 Frontier has asked Spirit to delay the shareholder vote on its proposed offer until July 27, citing the need for more time to gather sufficient proxy support.
July 13 Spirit said it intends to delay the shareholder vote on its merger deal with Frontier Group to July 27 as Frontier seeks more time to drum up proxy support for its buyout bid.

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

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Enjoy full access to Hospitality Ireland, our weekly email news digest, all website and app content, and every digital issue.
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