Tensions are rising between the two companies as Spirit shareholders’ vote on the JetBlue merger draws near.
Spirit Fights Back
Spirit has slapped back, addressing JetBlue’s latest claims and urging investors to vote FOR the merger with Frontier. The airline published a press release yesterday with the subheading:
JetBlue Misleads Spirit and JetBlue Stockholders with Inaccurate Statements and Mischaracterizations
The statement provides a point-by-point rebuttal to accusations published on JetBlue’s new website, “jetblueoffersmore.com”. The site makes a number of bold claims aimed at convincing shareholders to vote against the upcoming Spirit-Frontier merger, which will be decided at a special meeting on 10 June.
JetBlue’s website accuses Spirit of acting against stockholders’ interests, calling the Frontier agreement the “outcome of strikingly poor corporate governance and a flawed process.”. Moreover, they note that the Spirit board contains multiple directors appointed by Frontier’s parent organisation, Indigo partners, with five of these directors promised board seats in the new combined airline. JetBlue labelled this a “clear conflict of interest” and point out that they never reached out to other potential buyers when seeking a merger.
The website clearly touched a nerve with Spirit. Just three days after it was uploaded, the Florida carrier issued a press release in response. “JetBlue’s tender offer has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders,” the statement says, pointing out the flaws in JetBlue’s arguments.
The press release offers several paragraphs on why the JetBlue merger could never work, mainly relating to antitrust issues already faced by JetBlue over their partnership with American Airlines. Only a short section directly addresses the ‘conflict of interest’ accusations, simply stating that seven of eight of their board members are independent and that they have sufficiently discussed merger plans with JetBlue.
A Tactical Move?
In light of what they view to be an unrealistic offer from JetBlue, Spirit calls their proposal as a “cynical attempt to disrupt Spirit’s merger with Frontier”, and they may have a point. Were Spirit and Frontier to merge, they would pose a significant competitive threat to JetBlue. Antitrust concerns and the difference in Spirit and JetBlue’s operating models (the first runs an ultra-low-cost model whereas the latter is full-service) would be significant roadblocks for what JetBlue is putting forward.
The battle for hearts and minds is still going strong as the 10 June voting day draws ever nearer. Both airlines are keen to sway voters on the all-important merger decision. As such, JetBlue offered a response to Spirit’s statement the same day it came out, which starts with the line:
“It’s no surprise that Spirit shareholders are getting more of the same from the Spirit Board.”
Going on to accuse the airline of “distorting the facts” to distract shareholders and protect their “inferior deal with Frontier”. With 21 days left to go until the vote, there’s still a chance it could go either way, so stay tuned to Travel Radar for more updates!
Which way do you think shareholders will vote? Let us know in the comments below!