JetBlue Airways today issued an open letter to shareholders of Spirit Airlines:
The full letter follows:
Dear Spirit Shareholders,
Tomorrow, Spirit shareholders have YOUR chance to help assure you receive the most value for your Spirit shares by voting AGAINST the Frontier transaction.
If you want more value and more certainty, sooner, your choice is clear. By voting AGAINST the Frontier transaction you vote FOR:
- A superior all-cash price of at least $33.50 per Spirit share, a premium of 51% to the implied value of the Frontier transaction as of June 28, 2022;
- An accelerated payment of $2.50 per Spirit share – or 13% more than Frontier’s prepayment;
- Greater regulatory commitments, including a larger reverse break-up fee of $400 million and a more significant divestiture commitment than Frontier, despite similar regulatory profiles; and
- A ticking fee – a monthly prepayment of $0.10 per share from January 2023 until the deal is consummated or terminated.
In fact, Spirit shareholders would receive more cash in the unlikely event a JetBlue deal is terminated ($4.30 per share assuming the ticking fee is paid in full) than they would receive if the Frontier transaction is consummated ($4.13 per share).
Ultimately, however you assess the probability of regulatory approval of each transaction, you are always better off with the JetBlue transaction.
- As one of Spirit’s top ten shareholders said, “We firmly believe that if, as shareholders, we must wait for a transaction to be consummated following a lengthy regulatory process, we are much better off waiting alongside JetBlue, which is willing to compensate us along the way. The Board’s self-serving actions and failure to accept JetBlue’s $33.50 per share offer is preventing shareholders from receiving superior value.”
Only by voting AGAINST the Frontier transaction can you assure that you will receive the benefits of our offer.
The entrenched Spirit Board needs to know that you, their shareholders, want our better offer.
- Multiple Spirit directors have significant ties to Frontier’s controlling shareholder, Bill Franke,resulting in a conflicted Spirit Board more focused on securing an inferior transaction with Frontier than maximizing value for its own shareholders.
- While negotiating for eight months with Frontier, Spirit’s Board never seriously considered any alternatives, resulting in an original merger agreement with Frontier that was clearly suboptimal, with a low premium, no reverse break-up fee, and no divestiture commitment. Frontier has improved its offer twice only because we launched our “vote no” campaign.
- The Spirit Board consistently ignored or refused to engage with JetBlue until faced with certain defeat on the original shareholder meeting date and then, in an attempt to avoid the widespread perception of its poor corporate governance, pretended to engage with JetBlue.
- The Spirit Board continues to forgo any engagement or good faith negotiation with JetBlue, publicly rejecting our latest proposal in less than a day without ever discussing the amended terms.
Don’t let the Spirit Board’s allegiances to Frontier’s controlling shareholder keep you from the most value creating opportunity. This is the time to make your voice heard and deliver a clear message to the entrenched Spirit Board that you want the superior JetBlue transaction.
Vote AGAINST the Frontier transaction today.
Chief Executive Officer