Just in ! Spirit Airlines and Frontier Airlines Proposed merger may hit Roadblock , as Spirit Airlines shareholder 'Dionne Shuler' filed a suit against it !

Roadblock  for the  Merger of  Spirit Airlines and  Frontier  Airlines !

Spirit Airlines and Frontier Airlines Proposed merger may hit Roadblock , as Spirit Airlines Inc. shareholder 'Dionne Shuler' filed a suit against the 'attempt of shareholder voting' , that can take the merger process to the next stage.

• Two of largest low-cost carriers in the U.S. - Frontier Airlines and Spirit Airlines had agreed to merge , creating the fifth-largest airline in the country.
• The merger aimed to Serve Over 145 Destinations Across the United States, Latin America and the Caribbean Consumers, With $1 Billion in Annual Savings.

The Suit (No -1:22-cv-02141), "Dionne Shuler v. Spirit Airlines", filed at New York Southern District Court on 15th March 2022 , describe the merger process as unfair.

The suit also accused the the Airline board of rushing the company through sale process without exploring multiple suitors for the merger process.

Dionne Shuler also raised the involvement of multiple financial advisors at significant cost , in the process leading to the merger .

On 7th February 22 , the Merger announcement was released to press , where the Frontier Airlines will control 51.5% of the merged airline while Spirit will hold the remaining 48.5% , deal valued at $6.6 billion.

The Board of Directors for the new airline was proposed be comprised of 12 directors (including the CEO), seven of whom will be named by Frontier and five of whom will be named by Spirit. Mr. Franke will be Chairman of the Board of the combined company.

What was planned for the Shareholders ?

The combination of Spirit and Frontier is expected to deliver enhanced value to shareholders of both companies.

• On a combined basis, the company would have annual revenues of approximately $5.3 billion based on 2021 results.
• Once combined , Frontier and Spirit expect to deliver annual run-rate operating synergies of $500 million once full integration is completed, which will be primarily driven by scale efficiencies and procurement savings across the enterprise with approximately $400 million in one-time costs.
• The combined airline is expected to have a strengthened financial profile, with a cash balance of approximately $2.42 billion as of the end of 2021 on a combined basis.

Advisors Engaged !

Citigroup Global Markets Inc. is serving as financial advisor and Latham & Watkins, LLP is serving as legal advisor to Frontier . Barclays and Morgan Stanley & Co. LLC are serving as financial advisors and Debevoise & Plimpton LLP is serving as legal advisor to Spirit.