Spirit Airlines shareholders will vote on the airline's proposed merger with JetBlue next month as the $3.8 billion deal progresses. Shareholders will cast their vote on October 19th before the agreement will be subject to antitrust approval.
Spirit sets date for shareholder vote
According to a Spirit Airlines filing with the US Securities and Exchange Commission (SEC), shareholders will vote on the airline's merger with JetBlue on October 19th as the long-running saga nears the finishing line.
Spirit's board of directors approved a $3.8 billion bid from JetBlue on July 28th and urged shareholders to back them by voting in favor of the merger. Both parties expect the deal to be completed by the first half of 2024.
According to the Spirit filing,
"The board of directors of Spirit has unanimously adopted the merger agreement, has determined that the merger, on the terms and conditions set forth in the merger agreement, is advisable and in the best interests of Spirit and its stockholders, and unanimously recommends that Spirit stockholders vote “FOR” the merger proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal."
After a merger with Frontier Airlines looked the likeliest move for Spirit Airlines earlier this year, JetBlue swooped in with an unsolicited bid in April which eventually led to the Spirit-Frontier proposal collapsing in July.
Antitrust hurdles still remain
Even if Spirit shareholders vote in favor of the JetBlue deal, it will still be subject to antitrust approval. Spirit CEO Ted Christie had initially supported a merger with Frontier Airlines, stating that a deal with JetBlue would cause all kinds of problems with antitrust regulators.
Additionally, despite Frontier's $2.7 billion bid offering $1 billion less than JetBlue's, Christie argued that Spirit shares would be worth more in years to come to make up for the initial shortcoming. However, once the Frontier deal fell through, Christie promised to work to get the JetBlue deal over the finishing line.
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Fifth-largest US carrier if merger goes ahead
With a combined fleet of over 450 aircraft and another 300 planes on order, a Spirit-JetBlue merger would lead to the creation of the fifth-largest airline in the US. JetBlue CEO Robin Hayes has previously remarked that a merger could challenge the 'Big Four' - American Airlines, Delta Air Lines, United Airlines and Southwest Airlines. Hayes said,
"We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers on more routes."
As Simple Flying reported last week, Spirit's pilot union wants to agree a pay rise before a merger with JetBlue, noting a sizable difference in pay between Spirit and JetBlue pilots. While the saga looks to be reaching its conclusion, don't be surprised if there's another twist on the horizon.
Do you think the Spirit-JetBlue merger will go through without a hitch? Let us know your insights in the comments.