The shareholders of Spirit Airlines were due to vote on Friday, June 10th on whether to agree to the airline's upcoming merger with Frontier Airlines. However, the vote was delayed by almost three weeks, until June 30.
This step was taken due to the fact that JetBlue — another contender for a piece of the pie — continues, without weakening, to pursue Spirit, moreover, by the method of absorption and in a very hostile form. This threatens the Spirit-Frontier merger deal.
Both JetBlue and Frontier have changed their Spirit offerings in recent weeks, creating a bidding war of sorts and announcing completely different types of deals. Spirit's board of directors and management fully supported the proposal to merge with Frontier back in February.
On the other hand, JetBlue's hostile takeover bid is in the form of a tender offer. Literally, the airline has reached out to Spirit's shareholders and is trying to encourage them to “put the company up for auction”; — or sell your shares for significantly more than what is currently on the market.
«Delayed by vote», — Spirit reported on Wednesday morning. Should be allowed to have further discussions with stakeholders — by its own shareholders, Frontier and JetBlue.
Voting in favor of the Frontier deal would commit Spirit to the merger and effectively end any uncertainty.
In contrast, JetBlue said it was pleased with the delay: ” We welcome this event as a necessary first step towards genuine negotiations between the Board of Directors of Spirit and JetBlue, — Robin Hayes, CEO of JetBlue, said in a statement. “The Shareholders of Spirit are clearly calling on their Board of Directors to engage constructively with us and provide us with the same information that was previously available to Frontier so that we can reach an amicable deal.”
The situation is complicated by the fact that The DOJ could potentially sue to block the deals on antitrust grounds.
In general, for now, the deal remains on hold amidst uncertainty while discussions continue on next steps.