NEW YORK (AP) — The determination by Frontier Airlines to sweeten its provide for Spirit Airlines paid dividends Friday when an investor-advisory agency beneficial the deal to Spirit shareholders.
Glass Lewis supported the deal after Frontier added a $250 million breakup charge to the February settlement between boards of each price range airways.
The agency mentioned a rival provide by JetBlue exceeds the present worth of the Frontier deal “by a reasonably large margin,” however that JetBlue hasn’t made a compelling case to override Spirit’s argument that antitrust regulators would block a sale to JetBlue.
Glass Lewis mentioned Frontier “seemingly has a better path to closing” a deal than does JetBlue, and the agency mentioned it was inspired by the addition of a breakup charge to provide Spirit shareholders extra safety towards the chance that regulators oppose the sale to Frontier.
JetBlue mentioned Frontier and Spirit added the breakup charge solely when it turned clear that Spirit shareholders would vote down their merger. JetBlue included a $200 million charge to Spirit if regulators block its bid, which is price greater than $3 billion in money.
Frontier’s provide was initially price about $2.8 billion however has fallen in worth as Frontier shares have slumped. However, it might let Spirit shareholders preserve 48.5% of the mixed firm.
JetBlue disputed Glass Lewis’ findings, saying the agency carried out “a remarkably superficial regulatory evaluation.” It mentioned Glass Lewis endorsed the Frontier provide even because the agency acknowledged that Spirit’s board has not decided whether or not JetBlue’s bid carries higher monetary phrases.
Before Frontier added the breakup charge to its inventory and money provide, advisory agency Institutional Shareholder Services Inc. beneficial that Spirit shareholders vote down the Frontier bid and put stress on Spirit’s board to barter with JetBlue.
Shares of Spirit Airlines Inc. fell 2%, Frontier Group Holdings dropped 4%, and JetBlue Airways Corp. was almost unchanged in afternoon buying and selling Friday amid a broader market sell-off.
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