Originally Posted by
Directautogroup
Why would Frontier let them out of the agreement with no financial penalty?
I think they are backed into a corner and it’s either superior or a vote and the resulting risks that entails. If the Frontier is voted down there is no superior debate and it comes down to formulating a new plan on how staying independent is more valuable than JetBlue cash money which seems like a difficult argument to facilitate.
I would think after the debacle last week that the biggest shareholders have made their mandate clear.
Yes. The merger agreement and the $94.2m termination fee basically has Spirit on the hook for that even if they dont have the vote. So even if they say "we are taking our ball and going home without a vote," they still have to pay Frontier because the language is "adjournment or postponement" of the special meeting. So they can run, but they cant hide.
So I would be willing to bet Teddy loses his job if all he has to show for this at the end of the day is $94.2m off the Spirit books, which is around 3% of the company's total equity value.
"Hey I lost 3% of our entire value because of my poor handling of this merger, can I come to work tomorrow?"