How Spirit Airlines CEO Christie did his JetBlue deal U-turn

Spirit Airlines CE Ted Christie had been dismissive of the possibility that regulators would allow his low-cost US airline to be sold to JetBlue Airways Corp for the last four months. "You don't need to be an antitrust attorney to see the issues here," Christie stated in several media interviews after JetBlue unveiled its bid in April, gatecrashing a deal he had clinched in February to sell Spirit to Frontier Group. Christie argued that Spirit would cease to be a budget airline under JetBlue, driving up airfares. Yet this week he agreed to sell Spirit to JetBlue for $3.8b in cash, noting in a statement that he was "thrilled to unite with JetBlue" and that he would work to "complete the transaction." It was a reversal driven not by a change of conviction but by Spirit's failure to persuade its shareholders that they would be better off if they sold the company to Frontier for $2.7b in cash and stock, according to six people familiar with the matter who gave an account of the deal discussions on condition of anonymity. Christie had tried to convince Spirit shareholders that the shares they would receive in Frontier would significantly go up in value in the next two years and more than make up for Frontier's bid being over $1 billion lower than JetBlue's. He also argued that the Frontier deal was more likely to be approved by antitrust regulators. His pitch was not successful and he was forced to postpone the Spirit shareholder vote on the Frontier deal four times in a bid to muster more support from investors. He secured some small financial sweeteners from Frontier to their deal, but those were not enough to change Spirit shareholders' mind.<br/>