Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Spirit Airlines delays shareholder vote on Frontier deal

Published 06/08/2022, 07:04 AM
Updated 06/08/2022, 03:27 PM
© Reuters. FILE PHOTO: A logo of low cost carrier Spirit Airlines is pictured on an Airbus plane in Colomiers near Toulouse, France, November 6, 2018. REUTERS/Regis Duvignau

(Reuters) -Spirit Airlines Inc said on Wednesday it had postponed a shareholder vote on its sale to Frontier Group Holdings Inc to June 30 from June 10 after JetBlue Airways (NASDAQ:JBLU) Corp sweetened a rival offer for the budget carrier.

Spirit assessed it did not have enough shareholder support in favor of the deal with Frontier, even after the latter enhanced it last week by adding a $250 million regulatory break-up fee, according to people familiar with the matter.

Spirit reiterated on Wednesday that it had not changed its recommendation to shareholders to back the Frontier deal.

The company received an improved offer from JetBlue on Monday that included an increased $350 million break-up fee which would be payable to Spirit if antitrust reasons stopped the deal.

Either of the two deals for Spirit would create the fifth-largest U.S. airline. U.S. carriers have been trying to expand their domestic footprint while being dogged by labor and aircraft shortages.

Spirit will now seek to get better offers both from Frontier and JetBlue, the sources said. While JetBlue's $3.4 billion all-cash offer is higher than Frontier's, Spirit has said it does not believe regulators will approve a tie-up with JetBlue given the latter's partnership with American Airlines (NASDAQ:AAL) Group Inc.

"The special meeting was postponed to allow the Spirit Board of Directors to continue discussions with Spirit stockholders, Frontier and JetBlue Airways," the low-cost airline said in a statement.

JetBlue said it welcomed Spirit's move "as a necessary first step toward genuine negotiation".

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Spirit shares fell 1.2% in premarket trading, while JetBlue and Frontier traded slightly higher.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.