In February, Frontier Airlines announced a $ 2.9 billion planned acquisition of Spirit Airlines. JetBlue Airways unveiled its $ 3.6 billion cash rival bid in early April. triggered a bidding war for Spirit between the two carriers that has continued since then. Either potential merged airline combination will be the fifth largest in the United States. However, it seems that the war is finally coming to an end with Frontier and Spirit reaching comfortable conditions.
The biggest roadblock for Frontier’s acquisition of Spirit Airlines was not an offer proposed by JetBlue, but Spirit’s own shareholders. In early June, Institutional Shareholder Services, a proxy consulting firm, asked shareholders not to vote for the Frontier agreement. Spirit da postponed the vote on the acquisition until 30 June. The management of the Florida-based airline stated that they delayed the vote due to the lack of shareholder support, but continued to seek a better agreement with Frontier as their first option.
Today, Institutional Shareholder Services reversed its position and recommended a vote for a new agreement with Frontier Airlines. ISS stated: “Shareholders are best served by taking the agreement that provides the best combination of long-term value and compensation in the event of regulatory rejection. All in all, support for the merger with Frontier on the revised terms is justified. ” Frontier increased its bid by $ 2 per share ($ 4.13 per share), corresponding to an increase from JetBlue. Frontier also reverse raised Spirit’s termination fee to $ 350 million, an increase of $ 100 million.
JetBlue’s current $ 3.7 billionmillion offers may sound tempting, but the New York-based airline has done little to ease Spirits’ concerns that the government will not actually approve the deal. JetBlue is currently under anti-trust investigation for its strategic alliance with American Airlines. Asked by Spirit to end the controversial partnership for further negotiations, JetBlue declined. This rejected the claim somewhat hinted at that JetBlue simply wanted to disrupt the establishment of a direct industrial rival.