August 9, 2022

MediaBizNet

Complete Australian News World

Spirit postpones vote on Frontier agreement to continue talks with Frontier and JetBlue

Spirit postpones vote on Frontier agreement to continue talks with Frontier and JetBlue

July 7 (Reuters) – Spirit Airlines, Inc (Save. N) It said it has postponed a shareholder vote scheduled for Friday on its $2.4 billion sale to Frontier Group Holdings Inc (ULCC.O) So that its board can continue discussions with both Frontier and JetBlue Airways.

Reuters initially reported the planned delay.

Over the past few months, JetBlue and Frontier, led by influential airline investor Bill Frank, have repeatedly purged their bids for Spirit, in a bid to create the fifth largest airline in the United States.

Register now to get free unlimited access to Reuters.com

Sources told Reuters, who asked not to be identified because discussions are confidential, said Spirit’s shareholder vote, which has been postponed twice before, has been postponed for a third time to give Spirit and JetBlue time to finalize a deal.

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

JetBlue CEO Robin Hayes said in a statement that the airline was “encouraged by our discussions with Spirit and hope they now recognize that Spirit shareholders have indicated their clear and charming preference for an agreement with JetBlue.”

JetBlue submitted a $3.7 billion all-cash offer last month, but Spirit was reluctant to accept JetBlue’s more financially attractive offer due to concerns it would be rejected by antitrust regulators, according to the sources.

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

There is no certainty that JetBlue will provide Spirit with the guarantees needed on the regulatory front to strike a deal, and Frontier, which has already improved its offer, may return with a new offer, the sources added.

READ  Twitter shares plunge after Elon Musk closes $44 billion deal

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

Both bidders see Spirit as an opportunity to expand their domestic footprint and reshape the US airline industry, which is largely dominated by four domestic airlines. The acquisition by any of the exhibitors will come at a time when the industry is currently grappling with a shortage of labor and aircraft.

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

Register now to get free unlimited access to Reuters.com

(Reporting by Anirban Sen and Sophia Herbst Baylis in New York and David Shepardson in Washington); Rajesh Kumar Singh contributed to the report. Editing by Greg Rumiliotis, Bill Bercrout and Edwina Gibbs

Our criteria: Thomson Reuters Trust Principles.