Why Spirit Airlines Shares Are Gaining Altitude Today
Spirit Airlines (NYSE: SAVE) has again delayed a shareholder vote on its proposed merger with Frontier Group Holdings (NASDAQ: ULCC), providing investors with hope that a higher offer from JetBlue Airways (NASDAQ: JBLU) is still under consideration. Investors reacted by sending shares of Spirit up as much as 5% in Friday trading.
Spirit and Frontier announced plans to combine in February, in what seemed at the time a routine deal between two discount airlines. But JetBlue entered the fray a few months later with an all-cash offer that remains significantly higher than what Frontier had agreed to pay, setting off a bidding war for Spirit.
So far, Spirit's board has remained committed to the Frontier deal, arguing that despite the higher price, JetBlue's offer involves a lot more regulatory risk and could be hard to get over the finish line. Spirit had originally planned to seek shareholder approval for the Frontier deal last month, but has now postponed the meeting three times.
Source Fool.com
