TOGALOCK

The “superior proposal” statement isn’t even really their words either. It’s verbiage that’s defined in the contract that they currently have with Frontier. The JB proposal meets the criteria in the contract and therefore Spirit has an obligation to its shareholders to explore the proposal. There is already a class action lawsuit against spirit with shareholders vs. Spirit over Spirit accepting the Frontier agreement without publicly stating that they were for sale and opening themselves up to multiple offers. Agreeing to look at the JetBlue deal is a matter of legal due diligence, not a belief that they will be taking the offer. Their obligation is to the shareholders and their best interests over the long term. JB offering more money is only a piece of that puzzle.

At the end of the day NK and F9 are still further along in this process than NK and JB. A contract is already in place and, pending DOJ approval, the NK/F9 merger is a done deal. JB is simply waving money around at this point. It’s up to them to convince NK to break off their contract and plans with F9. If you look at all of the moves made by F9 and NK over the past year and a half or so, it’s obvious that this has been in the works between the two companies for a very long time. There’s been a lot of time spent aligning the two companies and their operations prior to the merger announcement was made public. Looking at it from that perspective, NK and F9 are far closer to the end of their merger journey than the beginning. JB is just now coming into the picture and will have to convince NK to give it all up, make all their work towards the F9 merger be for nothing, and pay F9 to break the contract.

It’s like buying a house: You sign the contract, you have money in escrow, loan is approved, and the moving truck is booked. You’re excited and have been waiting for this day since you first laid eyes on that dream home months ago. Now, a few days before moving in, someone with an apparent overinflated ego and sense of self comes along and offers the current owners more money than you and the current owners agreed to. In the end YOU are still the one under contract and it will cost the current owners heavily if they break that contract with you. The other person is nothing more than hot air at that point, but it doesn’t hurt for the current owners to at least let them talk, hear what they have to say and see if it would be worth the trouble of canceling their sales contract with you, or if the new offer screams “too good to be true”. That is where all companies involved in this three way tango are at right now.

People on here are already referring to the JetBlue merger in the present tense, the F9 merger in the past tense, and under the belief that just because JB is willing to write a bigger check that the NK/F9 deal is dead. In reality, it’s still very much alive and is still the front runner under contract until JB can convince NK that it shouldn’t be. This isn’t to say that NK may not ultimately end up with JetBlue, but this saga is just beginning. NK simply agreeing to talk to JB really doesn’t mean as much as people seem to believe it does. It doesn’t make the deal a slam dunk.