Spirit Airlines Delays Shareholder Vote On Frontier Merger Amid Bidding War With JetBlue

Spirit Airlines (SAVE) announced Wednesday that it postponed a stockholder meeting on its proposed merger with Frontier Airlines (ULCC) from Friday to June 30 as it weighs a competing offer from JetBlue Airways (JBLU).

"Spirit remains bound by the terms of the merger agreement with Frontier, and Spirit's Board has not determined that either JetBlue's unsolicited tender offer or its updated proposal received on June 6 constitutes a Superior Proposal," the company said in a statement.

The airline announced "no change" in its recommendation to company stockholders that they adopt the merger agreement with Frontier.

Spirit merging with either Frontier or JetBlue would mean the creation of the fifth-largest U.S.-based airline. That would make it a stronger competitor to airlines like Delta, Southwest, United, and American.

JetBlue on Monday improved its offer for Spirit. JetBlue raised its breakup fee to $350 million and offered to acquire all of the outstanding common stock of the company.

JetBlue's offer of $350 million was an increase of $150 million. Frontier's break-up fee is $250 million, which the company announced days before JetBlue's renewed offer.

Also included in the revised JetBlue proposal is that Spirit shareholders would get $31.50 per share in cash. The revision makes JetBlue's offer worth $3.4 billion. Frontier's offer is $2.9 billion as an initial value based on its offer to shareholders.

JetBlue also reached out to the airline's workers, offering better pay, better benefits, more jobs, career development, and no furloughs. Frontier's offer, which is a current agreement with the airline, avoids any job losses and would add 10,000 jobs by 2026.

Spirit rejected JetBlue's initial offer in May amid concerns there was a low likelihood of approval from regulators. Considering JetBlue's "Northeast Alliance" partnership with American Airlines, the company raised concerns about anti-trust regulations. The Justice Department is suing the Northeast Alliance to get rid of the partnership.

As of 1:30 p.m. ET on Wednesday, shares of Spirit were trading at $22.20, down $0.47, or 2.07%. Shares of JetBlue were trading at $10.30, down $0.38, or 3.56%, while Frontier Group Holdings were trading at $9.98, down $0.45, or 4.31%.