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JetBlue today welcomed the recent public support in favor of its clearly superior offer to acquire Spirit (NYSE: SAVE).

  • Institutional Shareholder Services (“ISS”), a leading independent proxy advisory firm, issued late yesterday an updated report now acknowledging that clients may find the modified JetBlue proposal “preferable” to the Frontier offer for Spirit and may therefore choose to vote AGAINST the inferior Frontier transaction at Spirit’s upcoming special meeting, despite ISS’s inability to change its official recommendation.
  • Further, major Spirit shareholder TIG Advisors publicly declared that it will vote AGAINST the Frontier merger at the Spirit special meeting, and sent a letter to the Spirit Board in which it said, “We believe JetBlue’s acquisition proposal is the far superior outcome for Spirit and its shareholders, given its all-cash bid eliminates execution risk and maximizes certainty of value.”

In its new report, ISS, citing the recent changes to JetBlue’s offer, noted that “the enhancements by JetBlue may be enough to offset the potential upside of the proposed merger with Frontier (particularly when the market reaction to last week’s developments is considered – Spirit share price decreased 8.0 percent on June 27, 2022, the first trading day after announcement of the revised Frontier offer terms).”

ISS further noted that “the gap between the headline offers has not only widened since Spirit and Frontier modified the deal terms late last week, but the prepayment dividend and the reverse termination fee accompanying the JetBlue offer are now more favorable for Spirit shareholders than the corresponding provisions accompanying the Frontier offer. At the same time, the addition of the ticking fee in the JetBlue offer – a provision without a counterpart in the Frontier offer – provides a further level of regulatory risk mitigation.”

By entering into a revised merger agreement with Frontier less than a week before the special shareholder meeting, the Spirit Board has given ISS, and all shareholders, little time to weigh the improved proposals.

“Our decisively superior offer is being recognized by Spirit shareholders and proxy advisors as providing more for Spirit shareholders than the ill-fated Frontier merger, which the conflicted Spirit Board has entered into,” said Robin Hayes, chief executive officer, JetBlue. “While we understand and respect ISS’s reticence to change their official recommendation so close to the special shareholder meeting, we note that they have specifically instructed clients how to change their votes to vote AGAINST the inferior Spirit transaction. We intend to continue to actively solicit votes to defeat the Frontier proposal and to take every possible step available to us to assure that Spirit’s shareholders have the opportunity to choose the superior value we are offering. The negative market reaction to Spirit’s revised merger agreement is consistent with what we are hearing from shareholders in addition to TIG Advisors. Shareholders can send a clear message to the Spirit Board by voting ‘No’ at the upcoming Spirit special meeting.”