JetBlue Uses Technology to Further Its Spirit Acquisition Plan
In the old days of business mergers and acquisitions – hostile or not – companies would make an appeal to stockholders of the firm it wished to acquire and have a platform to speak at shareholder meetings. It would further present the facts and figures already given to the potential acquired company, and press its case.
But times are different.
JetBlue Airways is using technology via the internet and an email campaign to speak directly with Spirit Airlines shareholders to convince them of the benefits of what has been a dramatic four-month merger triangle between JetBlue, Spirit and the original suitor, Frontier Airlines.
Last week, Spirit delayed its highly anticipated June 10 shareholder meeting to vote on whether to be acquired by JetBlue or merge with Frontier, in order to more carefully consider both offers. Almost immediately, JetBlue CEO Robin Hayes then leveraged his own customer email list to the airline’s True Blue frequent flier program – believed to number more than 2 million members, according to Inc. Magazine.
The email served a dual purpose. It not only gave an update on the possible acquisition plan to current JetBlue customers, but it directed them to a website that carried a specific message to Spirit shareholders. The hope was that not only were some JetBlue passengers also stockholders in Spirit, but that they would also forward the email to Spirit shareholders directing them to the website message.
Currently, Frontier made an offer of $21 a share for Spirit. JetBlue countered with $30 a share and then upped that to $31.50, with a $1.50 per share prepayment to stockholders up front, after Spirit initially declined the JetBlue offer.
JetBlue laid out its all-cash offer on the website with the following message:
“We urge Spirit shareholders to vote “AGAINST” Frontier’s inferior offer.
“Spirit shareholders have an important opportunity to maximize the value of their investment at Spirit’s upcoming special meeting. With a higher all-cash price, an accelerated prepayment, strong divestiture commitments, and a higher reverse break-up fee, JetBlue’s proposal is clearly superior to Frontier’s inferior offer. And yet, the entrenched Spirit Board of Directors has not acted in its shareholders’ best interests, preventing them from receiving the most attractive value-creating opportunity available to them.
“Why? We believe the answer is a clear conflict of interest.
“A vote “AGAINST” the inferior Frontier proposal will send a clear message that Spirit shareholders want the Board to pursue JetBlue’s superior offer, ensuring maximum and certain value for their investment and a better airline for all stakeholders.”
The practice of reaching out directly to shareholders is not illegal nor frowned upon. In fact, for many in the business community, it’s akin to putting out a message on social media. In fact in many business circles, it’s being used as a strong example of how to use your own customer lists.
Whether it convinces Spirit to ultimately choose JetBlue will be revisited at the vote on June 30.