Spirit and Frontier to Merge

Cherokee_Cruiser said:
Wonder if any of you changed your mind now? It’s almost as if it’s going down exactly as some of us said it would.

You can’t tell me as an investor that the current JetBlue deal at 33.50\share is worth “less” than the supposed Frontier deal which FINALLY got upped from a measly 2.13/share to 4.13/share and 1.9126 ratio of shares to ULCC, and posing some hypothetical that the stock “may” approach $40-50 in a couple years.

Yeah right.

Fiduciary duty REQUIRES the board to accept the higher offer, the biggest payout for investors. There’s a reason the F9 deal has been pushed off three times now. They want F9 badly, investors want their money - now, not some supposed could-be case later.

Break up fees. F9 has played the fear card that jetBlue and SAVE wouldn’t pass DOJ approval. That’s just horse manure. The 5th biggest airline being the 5th biggest airline is going to pass, with some divestures here and there. The big 4 control 80 some percent of travel capacity. There isn’t any stopping the remaining smaller players from trying to merge and compete better in the other remaining 20%.
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Did you read the cases I said would help you understand why the Spirit BOD is acting in the manner they are now? Did you send the demand letter to the BOD with your concern that they are not acting in the most fiscally prudent manner in which you hoped as an investor?

I do not know why you “tagged” me in this thread. I do know that you most likely are missing a step, or several, in a highly complex takeover scenario. I also know that the Spirit BOD would not put themselves at risk, personally, while going through this process. They have consulted in-house attorneys and probably have hired outside counsel to help guide the BOD through this process. Sorry you’re upset about how long this is taking but these are the risks you take as a shareholder to a publicly traded company.
 
amorris311 said:
Did you read the cases I said would help you understand why the Spirit BOD is acting in the manner they are now? Did you send the demand letter to the BOD with your concern that they are not acting in the most fiscally prudent manner in which you hoped as an investor?

I do not know why you “tagged” me in this thread. I do know that you most likely are missing a step, or several, in a highly complex takeover scenario. I also know that the Spirit BOD would not put themselves at risk, personally, while going through this process. They have consulted in-house attorneys and probably have hired outside counsel to help guide the BOD through this process. Sorry you’re upset about how long this is taking but these are the risks you take as a shareholder to a publicly traded company.
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He fundamentally doesn’t understand (I guess that applies to a lot of things) that the board’s duty is not to “accept the offer that represents the simple highest offer”…it’s to act in the best interest of the company and its shareholders.

My former company was acquired two years ago. One extremely large corporation made the first offer for us for $X per share…at which point another company said “hey, we’re willing to pay $1.2X per share. Our executive team tried to go with the first company for a number of reasons even though it represented a several billion dollars lower price. Company 2 eventually won out after increasing its offer…but its *not* just about the immediate valuation no matter how many times @Cherokee_Cruiser repeats it.
 
From JetBlue's latest press release today:

"We remain encouraged by the significant progress made in our ongoing discussions with Spirit. Additionally, Frontier has now confirmed that it does not intend to make any further changes to the terms of its latest proposal and that Spirit shareholders should consider it to be Frontier’s last, best and final offer, and itself has acknowledged that Spirit remains “very far” from receiving approval for that transaction. Despite this and Spirit’s shareholders repeated and now increasingly public acknowledgements that JetBlue’s latest proposal is clearly superior in every respect, by moving the Special Meeting again, the Spirit Board is delaying the ability of Spirit shareholders to receive JetBlue’s superior terms.
JetBlue is now standing ready to enter into a binding merger agreement with Spirit as soon as practicable and at the latest, immediately following Spirit shareholders voting against the Frontier transaction on July 27, 2022."

The way I read this, B6 and NK are possibly looking at an actual joint merger now vs an outright hostile acquisition. Interesting.
 
zmiller4 said:
He fundamentally doesn’t understand (I guess that applies to a lot of things) that the board’s duty is not to “accept the offer that represents the simple highest offer”…it’s to act in the best interest of the company and its shareholders.

My former company was acquired two years ago. One extremely large corporation made the first offer for us for $X per share…at which point another company said “hey, we’re willing to pay $1.2X per share. Our executive team tried to go with the first company for a number of reasons even though it represented a several billion dollars lower price. Company 2 eventually won out after increasing its offer…but its *not* just about the immediate valuation no matter how many times @Cherokee_Cruiser repeats it.
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So long story short, the company with the higher offer still won.

I’m not denying that it hasn’t happened the other way before. The quoted cases from Amorris are interesting. I have to note though, they are NOT airlines. This is a different industry. And in this particular case, they will still be the #5 carrier no matter who wins. The bottom line is that there is a case to be made that BOTH proposals would be just fine. I can see NK/F9 flourishing and NK/B6 flourishing as well.

Regardless. Doesn’t matter what we think. All that matters, now that it was a hostile takeover attempt, what shareholders want. I only have 1150 shares so that’s 1150 noes to F9. Now I’m seeing press articles saying that Frontier is (and I quote) “nowhere close” to having the amount of votes that would be needed to secure the deal. I’ve maintained that F9 needs to pony up and offer more cash. It could be they are tapped out. As for JetBlue, they’ve offered a few increases from the original offer, now standing at 33.50/share and a hefty breakup fee.

If I had to guess, I think B6 wins. But this is the airline industry: anything goes!
 
Cherokee_Cruiser said:
I’m not denying that it hasn’t happened the other way before. The quoted cases from Amorris are interesting. I have to note though, they are NOT airlines. This is a different industry. And in this particular case, they will still be the #5 carrier no matter who wins. The bottom line is that there is a case to be made that BOTH proposals would be just fine.
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The cases I suggested you read are seminal in the business law community. Being an airline, as you opine, means nothing when it comes to business law and mergers. The industry can be whatever you want, the process though, which is outlined in those cases, is the same when it comes to BOD’s and their M&A process. Please go read those cases again, not the Wikipedia version, so you have a better understanding of how this process works. I’m sure you have other shares of companies that will be going through something similar in the future and I do not want you to have any misunderstanding of how this process works.
 
Look sweeties, you’re both pretty. :)

@amorris311 is right…in principle and as a matter of law. BUT, in practice, a board that passes on a higher offer is almost ensuring shareholder litigation that they will spend years fighting. So while they are supposed to look at the entire package and make a business decision in the grahd scheme of things, in almost all cases, a board is going to take the higher offer.
 
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Welp, the F9/NK merger is terminated, as expected.

talks with NK and B6 continue

not surprised by the decision but already have My foot out the door
 
Dear Crewmembers,

I have great news to share. We have reached an agreement to buy Spirit Airlines to create a low-fare, customer-centric competitor to the Big Four airlines. This is exciting news, including for the many Crewmembers who have wanted us to accelerate our growth, especially in the focus cities outside of the Northeast and in legacy carrier hubs across the US.



Spirit's Airbus fleet and network fit perfectly with ours, and together with their 10,000 team members, we will fly more routes in more cities faster than we could on our own. Once Spirit is integrated into JetBlue we’ll be the nation's fifth largest airline, with about 9% market share. We'll still be smaller than the Big Four airlines, but with more than 1,700 daily flights we'll have more opportunities to challenge those legacy carriers to lower their fares and step up their game — just as we've been doing for 22 years.

A bigger JetBlue is good for Crewmembers, too. Whether you work on the front line or in the support center, a larger airline will provide more career and flying opportunities, as well as more investment in programs like JetBlue Scholars, our Gateways program and Support Center pathways.

The combined airline will be based in New York, but we will use this combination to expand our presence and grow jobs in Central and South Florida as well. We're looking forward to welcoming Spirit's team members into JetBlue once the deal closes. We've now had a chance to meet with Spirit's team face to face and have come to a very friendly place with them. I'm confident we will work very well together after closing. And we want all of Spirit's team members to feel welcome here at JetBlue. If you happen to talk to Spirit's team members on the line or while you are traveling, please share a little of that blue juice with them and let them know how excited we are that they will be joining us.

I know many of you will have your own questions about how we are going to integrate JetBlue and Spirit. It's important, though, we don't get ahead of ourselves. It will take quite some time before we are one airline. In fact, until Spirit's shareholders and the government approve our deal, we remain two separate companies with independent operations. And once we have gotten the green light to move forward, there will still be a lot of work to do to function as one, including sunsetting the Spirit brand, retrofitting their fleet and bringing together our operating and ticketing systems. We are also looking forward to learning from the Spirit team and bringing the best of the airline into JetBlue.

Now, while it's a long way off; when the time comes to consider incorporating our teams, especially combining unionized and non-union groups and groups with different unions, we're committed to working with our respective people and labor leaders to ensure a larger JetBlue is a winning proposition for all Crewmembers. And we will, of course, follow the law that governs seniority integration for our industry. All of this will not happen overnight though. Between JetBlue and Spirit, we'll put a great team in place to get the job done and we'll keep you posted in the months ahead.

Today is a day to celebrate though, I know there's a lot to manage in our day-to-day business right now, but we can't let that stop us from making game-changing moves that set us up for our future. By acquiring Spirit, we are making an important investment that will benefit us for the long term. In five or ten years we will look back on this as another defining moment for JetBlue, one that gave our one-of-a-kind airline with a brand that people love, award-winning service and everyday low fares, the opportunity to reach more people in more places than we ever have before. Thanks for all you are doing and we'll talk much more about this in the weeks and months ahead.



Robin Hayes
Chief Executive Officer
 
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