“We are pleased that ISS recognized that our proposal offers Spirit shareholders superior value and has a clear path to completion,” said Robin Hayes, chief executive officer, JetBlue. “The ISS report highlights the flawed process that the conflicted Spirit Board followed, which only underscores the need for Spirit’s Board to now come to the table and negotiate – this time in good faith – with JetBlue. Spirit shareholders can send that strong message to their Board by voting against the Frontier transaction and against adjournment.
“ISS highlighted that a deal with JetBlue will bring more value and cash certainty. We believe it is clear a combined JetBlue-Spirit will bring more competition with the Big Four airlines driven by the power of the JetBlue Effect, supporting our conviction that we can achieve regulatory approval for our transaction,” Hayes said.
JetBlue Offers Superior Value to Spirit Shareholders
ISS recognized that JetBlue’s current proposal, backed by years of financial and regulatory analysis in consultation with external advisors, offers full and certain value to Spirit shareholders at a substantial premium to the Frontier transaction – the value of which has only decreased since it was first announced.
The ISS report highlighted: “The offer from JetBlue is superior from a financial standpoint, with a cash consideration at a meaningfully higher premium than the mostly stock deal from Frontier … On balance, a potential agreement with JetBlue would appear to offer shareholders superior optionality, allowing those concerned with the turbulence ahead to exit at a significant premium, while allowing those with a more optimistic outlook to reinvest the premium consideration.”
Spirit’s Conflicted Board Is Not Serving the Best Interests of Its Shareholders
ISS’s conclusions on the sales process run by the Spirit Board also aligned with JetBlue’s contention that Spirit’s directors appear to be more aligned with the interests of Frontier and Bill Franke’s Indigo Partners than those of Spirit shareholders – as demonstrated by their misrepresentations regarding their engagement with JetBlue, and their desire to defend the inferior Frontier transaction at any cost. Spirit’s CEO has even admitted that if the Frontier transaction is voted down by its own shareholders, it will continue as a standalone company rather than pursuing a value-maximizing opportunity with JetBlue.
The ISS report noted: “The board's decision to forgo an auction process is a cause for concern, since investors lack market-based evidence that the deal presented in fact represents the best available alternative, as evidenced by the competing offer from JetBlue … In addition to the lack of a competitive process, shareholders may question the board's failure to negotiate a reverse termination fee with Frontier in light of the potential regulatory risk and JetBlue's offer of a $200 million termination fee (in a negotiated transaction).”
Confidence in Potential for Regulatory Approval and Recognition of Stronger Contractual Commitments
ISS noted that while its analysis did not determine regulators’ preference between the JetBlue-Spirit or Frontier-Spirit combinations, it concluded that “there appears to be no conclusive evidence that JetBlue’s proposal has zero chance of approval,” as the conflicted Spirit Board has falsely asserted.
The ISS report noted: “the [Spirit] board’s view that a Frontier merger has a safer path to regulatory approval is not supported by any guarantee of value for shareholders in the event of regulatory rejection. Spirit’s view that the Frontier proposal may have a smoother glide path towards achieving regulatory approval appears reasonable, but its assertion that the JetBlue proposal has zero chance of approval appears far less so.”
JetBlue Urges Spirit Shareholders to Vote AGAINST the Frontier Transaction
Spirit shareholders are encouraged to read more about JetBlue’s proposal, and the Spirit Board’s attempt to defend the inferior Frontier transaction, at JetBlueOffersMore.com. JetBlue urges Spirit shareholders to vote AGAINST the Frontier transaction on the BLUE proxy card, vote AGAINST adjournment of the special meeting, and tender their shares into JetBlue’s cash tender offer.
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