Spirit delays Frontier merger vote for third time, JetBlue bids its time

Spirit postpones Frontier merger vote for third time, JetBlue bids its time

The third postponement of the vote on the Spirit airline deal with one of the two competitors — Frontier or JetBlue — occurred late in the evening on Thursday, July 7, that is, a few hours before the appointed time. The meeting, which was postponed last week and earlier in June, is now scheduled for next Friday. 

Spirit said it was postponing the vote “to continue discussions with Frontier and JetBlue Airways” — two airlines purporting to be merged with Spirit. The delay could signal an improved chance for JetBlue's offering, especially since it promises Spirit's shareholders a lot of money. a substantially larger payout. 

Last week, when the final meeting was postponed for the second time, the media reported that Spirit's shareholders began to hesitate over the deal with Frontier, although it initially received the full support of the board of directors. It was back in February.

JetBlue came up with its proposal later in March. While the option is still viewed as a hostile takeover, Spirit said Thursday that its board is in talks with both JetBlue management and Frontier.

JetBlue is offering $33.50 per share in its takeover, thus valuing the company at about $3.7 billion. This is significantly more than Frontier's merger proposal.

If shareholders vote on the Frontier option on July 15, the two companies will work together to secure regulatory approval and close the deal before the end of the year. There will be more uncertainty about the next steps if the shareholders vote against the merger. This move will not be an explicit endorsement of the JetBlue proposal — it would simply be a vote against the Frontier merger.

Analysts believe the Frontier merger is likely to be approved by the Justice Department's antitrust division, unlike JetBlue's takeover bid.

Both proposals provide for a penalty to be paid to Spirit if regulators block the deal.

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