It was a long battle of offers and press releases from February till recently ! JetBlue was determined on the cancellation of proposed "Spirit Airlines - Frontier" deal and the "call off " announcement came shortly before Spirit was to announce the results of a shareholder vote on Frontier’s acquisition offer .
Spirit had repeatedly postponed the voting dates , as it sought to persuade shareholders to support the deal and ignore the allure of the sweetened JetBlue offer.
Spirit Airlines has announced that it has terminated the merger agreement with Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc.
“While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our Team Members on the transaction over the past many months,” said Ted Christie, President and CEO of Spirit Airlines. “Moving forward, the Spirit Board of Directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders.”
Spirit had initially turned JetBlue down , with a belief that the Frontier deal had a better chance with regulators and would be better for investors in the long run . But JetBlue continued to press it's candidature , sweetening its offer several times to lure the Spirit airlines shareholders.
JetBlue had most recently offered $33.50 a share, or roughly $3.6 billion , in cash for Spirit. JetBlue had also said it would pay a reverse breakup fee of $400 million if antitrust authorities block the deal. We may see an announcenent soon , as early as today or tomorrow on the deal between JetBlue and Spirit.
The called off proposal and JetBlue’s victory over Frontier may now start the phase of merger between JetBlue , but would go under the hammer of antitrust regulators to accept the deal along with a majority of Spirit’s shareholders to accept JetBlue.
The Justice Department has been watchful that airline competition is dwindling after years of mergers , and the U.S. administration has taken a tough stance on antitrust enforcement and corporate mergers broadly.
It's noteworthy that the Justice Department is already suing JetBlue and American Airlines , seeking to unwind a partnership between those two airlines. A trial is scheduled to begin this fall.
About the call off press release , Spirit Airlines says ,
This communication is for informational purposes only and is not intended to and does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, sale or solicitation would be unlawful, prior to registration or qualification under the securities laws of any such jurisdiction.
On the other hand , Frontier has said, it was disappointed that Spirit’s shareholders had not rallied behind the deal , but also said, Frontier was poised to grow as a stand-alone airline.
Barclays and Morgan Stanley & Co. LLC are serving as financial advisors to Spirit, and Debevoise & Plimpton LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors.
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