Proxy advisory agency ISS urges Spirit shareholders to select JetBlue supply over Frontier

Proxy advisory agency Institutional Shareholder Companies Inc has urged shareholders of Spirit Airlines to vote towards a proposed merger with Frontier Group Holdings.

JetBlue Airways Inc‘s competing supply of $30 a share is superior from a monetary standpoint, ISS mentioned in a report on Tuesday, with a money consideration at a meaningfully greater premium than the largely inventory deal from Frontier.

The worth of Frontier’s cash-and-stock supply for every share of the low cost service stood at $22.31 on Tuesday.

“The (Spirit) board’s view {that a} Frontier merger has a safer path to regulatory approval isn’t supported by any assure of worth for shareholders within the occasion of regulatory rejection,” the proxy advisory agency mentioned in a report launched on Tuesday.

Florida-based Spirit’s chief government, Ted Christie, mentioned final week that it’s unlikely shareholders would vote towards its proposed merger with Frontier.

The advisory agency additionally mentioned the board’s determination to forgo an public sale course of is a trigger for concern and shareholders might query the board’s failure to barter a reverse termination price with Frontier in mild of the potential regulatory threat and JetBlue’s supply of a $200 million termination price.

Responding to the ISS report, JetBlue mentioned the “report highlights the flawed course of that the conflicted Spirit Board adopted, which solely underscores the necessity for Spirit’s Board to now come to the desk and negotiate.”