The future of Spirit Airlines remained in limbo this week as the ultra low-cost carrier again postponed a shareholder vote on its proposed merger with Frontier as a bigger offer from JetBlue looms over the deal.
Late Thursday, Spirit announced that the special meeting scheduled for Friday would be postponed for one week so its board could continue discussions with the other airlines as well as stockholders.
The delay wasn’t unexpected, as JetBlue’s aggressive approach and $3.7 billion cash bid to buy the airline outright have seemingly eroded shareholder support for the February agreement with Frontier, a $2.4 billion cash-and-stock merger.
“We are encouraged by our discussions with Spirit and are hopeful they now recognize that Spirit shareholders have indicated their clear, overwhelming preference for an agreement with JetBlue,” JetBlue CEO Robin Hayes said in a statement.
Conversely, Frontier’s CEO Barry Biffle told USA Today last week that the offers are completely different deals and have different odds of success from an antitrust perspective.
“On one hand, you’ve got the Frontier-Spirit merger that lowers fares for consumers and gives more low fares to more people in more places. And on the other hand, the JetBlue alternative will actually raise prices for consumers. That’s why this is a nonstarter, if you will, from a Department of Justice perspective,” Biffle said.
If either deal goes through, it would create the fifth-largest airline in the U.S. and the largest ULCC in the domestic market.
Spirit’s board remains focused on the Frontier offer, believing that federal regulators will not sign off on a JetBlue deal. JetBlue, which says either path forward will undergo heavy scrutiny, has sweetened its offer in hopes of scuttling the Frontier deal. In response, Denver-based Frontier upped its offer, as well.
Both carriers also have been increasing their break-up fees—payable to Spirit shareholders if regulators nix the deal—with JetBlue’s $350 million about $100 million higher than Frontier’s fee.
Thursday’s announcement was the third time the shareholder vote on the Frontier merger has been postponed. It’s now scheduled for July 15.