As with any merger or acquisition or takeover, the numbers are laid out in black-and-white. Everything that shareholders need to make an informed voting decision will be made known to them.
For Spirit Airlines stockholders, it's the unknown that outweighs the known.
And that unknown is the powerful United States Department of Justice.
Spirit shareholders will vote on Friday, June 10, on whether to accept the hostile takeover made last month by JetBlue Airways or to go with a bid to merge made in February by Frontier Airlines.
The JetBlue bid was higher and included a $200 million reverse break-up fee. Frontier countered by making a $250 million break-up offer. JetBlue countered back this week by improving its overall bid to $31.50 per share from $30, and upping its break-up fee to $350 million. Frontier's original offer was a $2.9 billion transaction; JetBlue's offer now hovers at nearly $3.8 billion.
That's a lot of money.
But it only begs the obvious question: Will any amount of money convince Spirit to pick the JetBlue offer over Frontier and run the risk of the Department of Justice voiding the deal? That has been Spirit's biggest concern through this whole four-month saga. Based on the ongoing antitrust suit filed by the DOJ and six states over JetBlue's agreement with American Airlines known as the Northeast Alliance, Spirit is worried that government would kill any deal with JetBlue.
Spirit CEO Ted Christie still believes his shareholders will pick Frontier. But last week an outside proxy firm wrote a report advising Spirit to take the JetBlue offer for a better financial gain.
Now all of a sudden, those black-and-white numbers that Spirit shareholders will look at on Friday aren't so cut-and-dried thanks to the 800-pound gorilla in the room known as the DOJ. Certainly, a Spirit-Frontier merger will face regulatory approval as well. But the scrutiny will hardly be as intense as a JetBlue takeover of Spirit.
So far, JetBlue has been careful to just about avoid addressing the concerns about the DOJ. In fact, in a lengthy letter written specifically to Spirit employees by JetBlue Chief Executive Officer Robin Hayes on Monday - extolling the virtues of a JetBlue-Spirit collaboration - there was no mention of the concerns over regulatory approval.
Nor was there any mention of it in JetBlue's terse response to Spirit Airlines shareholders on May 19 after the Spirit Board of Directors voted to recommend accepting the Frontier bid.
Now it comes down to the wire with a Friday vote looming.
Confidence - or fear - in the unknown will ultimately drive this decision.
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