JetBlue managed to screw up the merger agreement between Spirit Airlines and Frontier. On Wednesday, in a shareholder vote after several postponements, the decision was to withdraw from the negotiation that would give rise to the 5th largest US airline.
Frontier had reached a $2.7 billion bid for control of Spirit Airlines, whose executive committee it supported pointing out regulatory risks in a potential merger with JetBlue.
But the arguments failed to convince shareholders, who were seduced by JetBlue’s highest bid, which is expected to reach $3.7 billion – a deal is rumored to be due this Thursday.
Frontier and Spirit had announced a prior agreement in February, prompting a reaction from JetBlue. The New York-based carrier then began to make aggressive offers to try to stop the merger.
JetBlue’s acquisition of Spirit is likely to give rise to legal disputes as there are complex agreements at stake such as the Northeast Alliance (NEA) agreement with American Airlines and even market concentration.
“While we are disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination, the Frontier board took a disciplined approach,” said Bill Franke, Frontier’s CEO.
