Proxy advisory firm ISS urges Spirit shareholders to pick JetBlue offer over Frontier
JetBlue Airlines’ plane departs near Spirit Airlines aircraft at Fort Lauderdale-Hollywood International Airport, Fort Lauderdale, Florida on May 16, 2022.
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JetBlue Airways IncISS stated Tuesday in a report that the competing offer, which is $30 per share, was better from a financial perspective. It also offers a significantly greater premium over Frontier’s stock-only deal.
Frontier’s Cash-and-Stock Offer for Each Share of Discount Carrier was $22.31 as of Tuesday.
In a Tuesday report, the proxy advisory firm claimed that “The Spirit Board’s opinion that Frontier mergers offer a safer route to regulatory approval does not support any guarantee of shareholder value in the event regulatory rejection occurs.”
Ted Christie (Florence-based Spirit) stated that Frontier is not likely to be opposed by shareholders last week.
Additionally, the advisory firm stated that the board decided to skip an auction process. This raises concerns for shareholders. In light of potential regulatory risks and JetBlue offering a $200m termination fee, it is possible for the board to fail to negotiate a reverse fee with Frontier.
JetBlue, in response to the ISS report said that JetBlue “reports the flawed process followed by the conflicted Spirit Board, which only underlines the need for Spirit’s Board today to get to the table, negotiate.”