After new information is casting a shadow of a doubt on the merger, Frontier chief executive Barry Biffle told Spirit they will waive their right to match JetBlue’s latest purchase offer.
Proxy Information Creating Concerns for Previously Announced Frontier-Spirit Merger
In February, Frontier and Spirit announced their intention to come together and create the nation’s largest low-cost carrier with international reach. Following the announcement, JetBlue threw their hat in the ring with a competing offer, followed by a long information campaign to sway shareholders to vote against the Frontier merger.
Although Spirit has stood by their agreement with the Denver-based airline, the shareholder vote to confirm the deal was delayed three times after increased offers from JetBlue. As a result, the Miramar, Fla.-based carrier could end up merging with their counterpart in New York instead.
Reuters reports Frontier chief executive Barry Biffle sent a letter to Spirit head Ted Christie dated Sunday, July 10, 2022, in which he announced they would waive their right to match JetBlue’s latest offer, calling their latest offer their final one. This comes as The Washington Post reports Biffle wrote that they “…remain very far from obtaining approval from Spirit stockholders based on the proxy data we received as of July 8.”
Biffle is reportedly asking Spirit to push back their shareholder vote once again, to July 27, 2022. Frontier is looking to rally Spirit shareholder support for the merger. If the vote to approve their deal is denied by the shareholders, the low-cost carrier says they do not plan to utilize their right to match the JetBlue offer.
Spokespersons from neither Frontier nor Spirit have commented on the letter between the two executives seen by the media. The last comment from JetBlue came after the latest delay of Spirit’s special shareholder meeting, at which time airline chief executive Robin Hayes said in a press release they were “encouraged by our discussions with Spirit and are hopeful they now recognize that Spirit shareholders have indicated their clear, overwhelming preference for an agreement with JetBlue.”
Mergers Yet to Face Scrutiny from Government Regulators
While either option is yet to be approved by shareholders, any deal would still face a steep test from both the U.S. Department of Justice and the Department of Transportation. The Justice Department remains in a lawsuit against both JetBlue and American Airlines over antitrust allegations within their Northeast Alliance, while the question of what Spirit will do with new slots earned at Newark Liberty International Airport (EWR) remains in the air.
Source: frugal travel guy