Shares of Frontier Airlines and Spirit Airlines tumbled Monday after their improved merger proposal won a key endorsement just days ahead of a crucial shareholder vote.
Frontier CEO Barry Biffle said Monday that he is optimistic Spirit shareholders will approve Frontier’s latest stock-and-cash offer for Spirit when they vote Thursday.
“I think we have a lot of momentum, so we feel really good,” Biffle said in an interview.
Over the weekend, proxy advisory firm Institutional Shareholder Services reversed itself and recommended Spirit shareholders approve the deal when they vote Thursday. ISS had initially opposed the proposal, bolstering the effort by JetBlue Airways to swoop in and grab Spirit with an all-cash bid worth about $3.6 billion.
Frontier's shares closed Monday down more than 11% and Spirit dropped about 8%. JetBlue rose less than 2%.
Frontier’s bid was valued at $2.9 billion when announced in February, but has lost some value because of a decline in Frontier’s stock price. Frontier added $2 per share in cash and a larger reverse breakup fee to its offer late Friday, prompting the new evaluation by ISS.
Denver-based Frontier and Spirit, based in Miramar, Florida, say that antitrust regulators won't let New York-based JetBlue buy Spirit, which JetBlue disputes.