As deal support wanes, Spirit agrees to delay shareholder vote on Frontier merger to July 27

Broward County’s Spirit Airlines said Wednesday it will again postpone a shareholder vote to determine whether the discount airline will merge with Frontier Airlines, pushing the vote back to July 27.

The announcement comes two days after Frontier Airlines CEO Barry Biffle said in a letter made public Monday that his Denver-based airline is “very far” from securing approval by Spirit shareholders, who are weighing a more lucrative buyout offer from New York-based JetBlue Airways. This is the fourth time the special shareholders’ meeting has been postponed.

Spirit’s statement on Wednesday reiterated that the company’s board of directors unanimously recommends shareholders vote to move forward with the Frontier merger that the two airlines announced in February.

Frontier CEO Barry Biffle said in a letter made public Monday that his Denver-based airline is “very far” from securing approval by Spirit shareholders, who are weighing a more lucrative buyout offer from New York-based JetBlue Airways.

JetBlue is offering an unsolicited cash bid of $33.50 a share, and up to $34.15, or roughly $3.7 billion.

Meanwhile, Frontier is offering Spirit shareholders $4.13 in cash and about 1.9 shares of Frontier for every share of Spirit, or nearly $2.7 billion at Frontier’s current share price. Spirit shareholders would own 48.5% of the combined airline, while Frontier stockholders would command controlling interest of the national discount airline.

The merger would create the nation’s fifth-largest airline to compete with American Airlines, Southwest Airlines, Delta and United.

Miramar-based Spirit, which employs 3,400 workers in South Florida, agreed in February to merge with Frontier in the cash-and-stock transaction.

Spirit’s board has stood behind a February deal it struck with Frontier to combine the two discount airlines.

“However, we still remain very far from obtaining approval from Spirit stockholders based on the proxy data we received as of July 8,” Biffle wrote to Spirit CEO Ted Christie and the airline’s General Counsel Thomas Canfield.

The vote had been scheduled for July 15, but Frontier and Spirit know from proxy data how investors are voting. Spirit’s largest shareholders have declined to comment.

Biffle asked for another delay until nearly the end of this month, if the merger plan still lacks the votes for approval by later this week so that Frontier can have more time to lobby Spirit shareholders.

Biffle said that if Spirit’s board changes its mind and supports the JetBlue bid, Frontier would waive its right to match the offer. He said Frontier has already submitted its best and final offer.

Spirit’s CEO, the company’s board of directors, as well as airline industry analysts, have said federal regulators likely would not ever give final clearance for JetBlue to acquire Spirit, due to anti-competitive concerns and fears that such a deal would lead to higher customer airfares. Realizing those concerns, JetBlue is offering Spirit a $400 million breakup fee should Spirit accept its bid and regulators not approve it.

The Associated Press contributed to this report.

This story was originally published July 11, 2022 at 4:18 PM.