Having received improved proposals from JetBlue and Frontier, Spirit Airlines Board of Directors recommends the airline’s stakeholders to vote in favor of the proposed merger with Frontier.
The Spirit Airlines Board of Directors unanimously recommends stockholders vote in favor of the merger agreement with Frontier, according to the company’s statement on June 24, 2022.
The recommendation is based on the improved terms offered by Frontier as well as the revised proposal and ‘extensive’ discussions with another competitor JetBlue, according to the statement.
"We are thrilled to announce the terms of Spirit’s amended agreement with Frontier, which includes nearly double the per-share cash consideration of our prior agreement with Frontier while still allowing stockholders to benefit from the economic upside of airline industry recovery,” said Ted Christie, President and CEO of Spirit.
The company has outlined that under Frontier’s improved proposal, Spirit shareholders would receive 1.9126 Frontier shares plus $4.13 in cash. Frontier has also agreed to increase its reverse termination fee to $350 million to Spirit if the merger is halted due to antitrust reasons. In exchange, Spirit has agreed to give up one seat on the newly combined company’s board of directors.
Meanwhile, after receiving an improved proposal by JetBlue on June 20, 2022, and engaging in what it describes as “extensive” discussions, Spirit board maintains that the revised offer is not a ‘Superior Proposal’, citing regulatory impediments. “Spirit does not believe that a JetBlue transaction will overcome regulatory objections,” the statement reads.
In February 2022, Frontier and Spirit Airlines announced merger plans with an aim to create an “aggressive ultra-low-fare competitor” in the US aviation market. In April 2022, JetBlue challenged the deal by submitting a $3.6 billion cash takeover bid for Spirit Airlines. Spirit rejected the initial proposal and several subsequent improved proposals by JetBlue.
The meeting during which Spirit stockholders will vote for or against the proposed merger with Frontier will take place on June 30, 2022. It was initially scheduled for May 10, 2022, and later moved two times to June 10 and the currently standing June 30th.