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• Shareholder voting date postponed to June 30 from June 10
• Airline assessed that it would not have enough votes in favor of Frontier’s deal
Spirit Airlines Inc (NYSE: SAVE) on Wednesday said it had postponed the crucial shareholder vote on its sale to Frontier Group Holdings Inc (NASDAQ: ULCC) from June 10 to June 30 after JetBlue Airways Corp (NASDAQ: JBLU) sweetened a competing offer for the budget carrier.
The airline assessed that it did not have enough votes in favor of the deal with Frontier, Reuters reported citing people familiar with the matter.
Spirit reiterated on Wednesday that the company still recommends its shareholders to back the Frontier deal.
The Florida-based airline received a revised offer from JetBlue on Monday that said Spirit shareholders would receive $31.50 per share in cash, among which $30 at deal close and $1.50 prepayment after Spirit shareholders vote to approve the deal.
JetBlue also increased the breakup fee to $350 million, which would be payable to Spirit if antitrust reasons stopped the deal.
Either of the two deals for Spirit would create the fifth-largest U.S. airline. U.S. carriers have been trying to expand their domestic footprint while being dogged by labor and aircraft shortages.
Spirit will now seek to get better offers both from Frontier and JetBlue, the Reuters report said.
While JetBlue’s $3.4 billion all-cash offer is a financially superior offer than Frontier’s, Spirit has said it does not believe regulators will approve a tie-up with JetBlue, given the latter’s partnership with American Airlines Group Inc (NASDAQ: AAL).
“The special meeting was postponed to allow the Spirit Board of Directors to continue discussions with Spirit stockholders, Frontier and JetBlue Airways,” the low-cost airline said in a statement.
JetBlue welcomed Spirit’s move and said it was “a necessary first step toward genuine negotiation.”
Picture Credit: ABC News
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