The Wall Street Journal
By Alison Sider And Will Feuer
Updated July 11, 2022 5:19 pm ET
Frontier Group Holdings Inc. said it is done bidding against rival JetBlue Airways Corp. for Spirit Airlines Inc., and wants Spirit to delay its shareholder vote once again to allow Frontier more time to persuade skeptical Spirit investors.
In a letter Sunday, Frontier Chief Executive Barry Biffle said that Frontier’s latest offer for Spirit late last month was its “last, best and final” proposal, and asked Spirit’s board to publicly reaffirm its commitment to that deal. The letter was released publicly Monday.
Spirit has been the subject of a tug of war between Frontier and JetBlue that has dragged on for months, and Mr. Biffle’s letter came as talks between Spirit and JetBlue have progressed, according to people familiar with the matter.
JetBlue sought to upend a merger between Spirit and Frontier that was first announced in February, and swooped in with a competing all-cash offer. A bidding war ensued, and JetBlue is now offering about $3.7 billion in cash for Spirit in an effort to wrest the budget carrier away from Frontier.
Spirit had resisted JetBlue’s advances and encouraged its investors to instead approve Frontier’s cash-and-stock offer, now worth roughly $2.7 billion, arguing that the Frontier deal would be better for shareholders in the long run and stood a greater chance of clearing regulatory hurdles.
Either deal would create the fifth-largest U.S. airline. While JetBlue’s offer is higher, Frontier and Spirit have argued that antitrust regulators would likely block it and that investors would see little of that money. JetBlue has countered that both deals would face close regulatory scrutiny, with similar levels of risk, making its higher price tag more compelling.
Major proxy advisory firms backed the Frontier merger, but investors haven’t been won over, with a swath of holders, including some large investors, resistant to that deal, according to people familiar with the matter. Mr. Biffle said Frontier needs more time to stand a chance of persuading them.
“We still remain very far from obtaining approval from Spirit stockholders,” based on data from last week, Mr. Biffle wrote in the letter to Spirit CEO Ted Christie and Thomas Canfield, its general counsel.
Spirit declined to comment. Spirit shares fell 2% Monday, while JetBlue shares lost 2.1% and Frontier shares were down 0.3%.
Spirit has already pushed back its shareholder vote on the Frontier deal three times, most recently delaying it until Friday, July 15. Mr. Biffle asked in the letter that Spirit delay the shareholder vote to July 27 if Spirit hasn’t received enough votes in favor of the Frontier deal by Friday.
“As has been the case throughout this process, we remain committed to this transaction,” Mr. 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,” he wrote, adding that Frontier would consider waiving its rights to match JetBlue’s bid.
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