LaGuardia International Airport Terminal A for JetBlue and Spirit Airlines in New York.
Leslie Josephs | CNBC
Proxy advisory firm Institutional Shareholder Services on Friday reversed its stance on Spirit Airlines’ planned merger with Frontier Airlines, urging Spirit shareholders to vote against the deal and calling JetBlue Airways’ all-cash offer a “superior alternative.” , another twist in the budget airline battles.
ISS in May initially asked shareholders to vote against Frontier’s cash-and-stock deal, then in late June changed its recommendation after Frontier sweetened its offer to include a reverse separation fee that matched JetBlue.
Now ISS has withdrawn its recommendation citing market volatility, energy prices and recession fears that “may lead shareholders to conclude that the security of the cash consideration value is preferable to the good of possible Frontier agreement”.
Frontier CEO Barry Biffle on Sunday called its latest sweet deal the “best and last” in a letter to peer Spirit and fretted about the lack of shareholder support for that deal.
Advisory firm Glass Lewis last month recommended shareholders vote in favor of the Frontier deal.
The change follows repeated delays in a shareholder vote on the Frontier-Spirit deal, which Spirit has delayed four times. The vote is now set for July 27.
“We remain confident that Spirit shareholders continue to overwhelmingly recognize the clear superiority of our proposal,” JetBlue said in a statement Friday, again urging Spirit shareholders to vote against the Frontier deal.
Spirit declined to comment, while Frontier did not immediately respond. Shares of JetBlue rose 2.4% on Friday, while Spirit rose 3.2% and Frontier finished 1.3% higher.
