JetBlue-Spirit merger ‘increasing likelihood’, says financial analyst

JPMorgan Chase, one of the nation’s leading financial services companies, expressed optimism this week that Spirit Airlines will choose JetBlue Airways as its merger partner.

In a note to clients, analysts at the venerable company believe JetBlue’s bid to acquire Spirit is progressing, according to Reuters News Service.

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The merger is a “growing probability,” JPMorgan wrote.

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Additionally, JPMorgan said JetBlue — which has a reciprocal agreement with American Airlines called Northeast Alliance and has firmly refused Spirit’s request to drop it — could be swayed to drop the Alliance.

“Mergers are transformational by design,” the note says.

Spirit is concerned that a Justice Department antitrust lawsuit against JetBlue and American’s Northeast Alliance could undermine regulatory approval of any JetBlue-Spirit merger.

Originally, Spirit announced a merger with Frontier Airlines in February until JetBlue stepped in with a higher counter-offer in April. When Spirit rejected that investigation and a subsequent offer that sweetened the deal, JetBlue launched a hostile takeover bid last month.

Spirit shareholders were due to vote on the offer to be accepted at a meeting on Friday June 10. But a sign that he is still studying JetBlue’s proposal, the vote has been postponed and will now take place on June 30.

In an interview with Reuters on Friday, JetBlue CEO Robin Hayes also expressed optimism about his airline’s ability to complete the Spirit acquisition.

“We are delighted that there now appears to be a genuine desire on the part of the Spirit board to engage with us,” Hayes told Reuters in an interview on Friday evening. “We will continue to engage with the Spirit board over the coming weeks.”