It was the third time that Spirit called off a vote on the Frontier deal that is favored by the Spirit board. The delay appeared to indicate that the merger of the two discount airlines lacks shareholder support in the face of a JetBlue bid that is higher in current value.
JetBlue CEO Robin Hayes said he was encouraged by recent talks with Spirit officials “and are hopeful they now recognize that Spirit shareholders have indicated their clear, overwhelming preference for an agreement with JetBlue.”Florida-based Spirit, the nation’s largest discount airline, struck a deal with Frontier in February and has stuck with it as a bidding war heated up between Denver-based Frontier and New York-based JetBlue.
The zeal of JetBlue’s pursuit has surprised many in the airline industry and been met with skepticism on the stock market. Through Thursday, shares of JetBlue have tumbled 43% since it entered the bidding war, more than any other major U.S. airline. Frontier, now seen as unlikely to get Spirit, has dipped 10% during the same stretch.
JetBlue is offering Spirit shareholders $33.50 in cash, or $3.6 billion. Frontier’s bid is mostly stock and only $4.13 per share in cash. At Frontier’s current stock price, the airline’s bid is worth about $22 per share, or $2.4 billion.
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