Boy, Spirit Airlines CEO Ted Christie and the carrier's Board of Directors must really want that shareholder approval for a merger with Frontier Airlines.
For the fourth time in five weeks, Spirit this morning announced it was again postponing its shareholder voting meeting on whether to merge with Frontier or accept the takeover bid by JetBlue Airways.
The latest vote was scheduled for Friday, July 15.
It will now be on Wednesday, July 27.
Spirit said the delay was in response to a letter it received from Frontier CEO Barry Biffle, who said he was done getting into a bidding war with JetBlue and admitted his airline does not have enough support from Spirit stockholders to win the vote, based on his projections.
In a statement released early this morning, Spirit said it "intends to reopen and immediately adjourn its Special Meeting of Stockholders (the "Special Meeting") relating to the proposed merger agreement with Frontier until July 27, 2022 at 11:00 am ET, at which time the Special Meeting will reconvene," the airline said. " Spirit will continue to solicit proxies from its stockholders with respect to the proposed merger with Frontier, and will continue discussions with Frontier and JetBlue Airways Corporation (NASDAQ: JBLU). The Spirit Board of Directors reiterates its commitment to the Frontier transaction."
Frontier's offer is worth about $4.13 a share to Spirit stockholders with a deal for almost 1.9 shares of Frontier stock for every share of Spirit. That's about $1 billion less than JetBlue's proposal of $33.50 or a $3.7 billion total package.'
From a straight-up money comparison, it's a no-brainer for Spirit stockholders. One of Spirit's biggest shareholders, Discovery Capital, urged other fellow stockholders to abandon the idea of merging with Frontier and to accept the JetBlue deal.
Discovery Capital owns about 1.4 percent of Spirit Airlines.
But the concern from Christie and the Spirit Board is the current Department of Justice investigation into JetBlue and American Airlines, which formed the 'Northeast Alliance' two years ago to combine forced on lucrative east coast routes. Spirit fears that any proposed merger with JetBlue will not pass regulatory approval.
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