About 72 hours after Spirit Airlines’ board of directors delayed a shareholder vote on a proposed merger with Frontier Airlines, the Denver-based airline indicated the deal is in dire straits and asked for another postponement.
In a letter dated Sunday, Frontier CEO Barry Biffle wrote to Spirit CEO Ted Christie that the airline “remains very far from obtaining approval from Spirit stockholders” and asked Spirit to provide “clarity” on a competing, larger offer from JetBlue Airways.
“We remain committed to this transaction,” Biffle wrote. “However, should the Spirit Board of Directors conclude that it would instead desire to pursue an alternative transaction with JetBlue, we would appreciate being advised of that determination.”
In the letter, he asked Spirit’s board to postpone the July 15 shareholder vote to July 27.
JetBlue’s aggressive approach and $3.7 billion cash bid to buy Spirit outright have apparently eroded shareholder support for the February agreement with Frontier, a $2.4 billion cash-and-stock merger.
While Frontier has upped its offer and break-up fee—payable to Spirit shareholders if regulators nix the deal—several times to compete with JetBlue, Biffle said his airline has issued its “last, best and final offer” to Spirit.
Biffle’s letter and previous comments from JetBlue indicate momentum has shifted in JetBlue’s favor to complete a purchase that would create the fifth-largest airline in the U.S.
“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 Friday after the shareholder vote was delayed.
Frontier maintains that U.S. regulators will not sign off on a JetBlue-Spirit deal for competitive reasons and that their merger is more likely to receive approval. Biffle has said that the JetBlue proposed deal will raise prices for consumers while his airline’s proposal will lower prices.