A luxury vacation doesn't have to come with a huge carbon footprint — especially if you travel by train.
03.11.2023 - 22:47 / thepointsguy.com / Ted Christie
New details are coming to light surrounding Spirit Airlines' initial resistance to a merger offer from JetBlue Airways — and what led the ultra-low-cost-carrier to change its mind and sign on with the New York-based JetBlue.
During an antitrust trial that began this week in Federal District Court in Boston, Ted Christie, Spirit's CEO, testified about how — and why — the merger agreement came to pass.
Although Spirit had initially agreed to merge with ULCC competitor Frontier Airways, JetBlue made a compelling and unsolicited offer involving significantly more cash.
However, Spirit's board wasn't interested.
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The board saw JetBlue's Northeast Alliance (NEA) partnership with American Airlines as a major regulatory risk, one likely to kill any merger agreement that it might reach with JetBlue.
Even so, the board recognized that with some modifications, JetBlue's offer could trump Frontier's — a "superior proposal" — which meant that under the terms of the existing agreement with Frontier, the board could begin engaging with JetBlue.
Spirit's board demanded a "come hell or high water clause," as CEO Ted Christie described it, before agreeing to consider JetBlue's offer.
Such a clause, according to Christie, would entail JetBlue agreeing to do virtually anything in its power to achieve regulatory approval for the Spirit deal, including abandoning the NEA if it appeared that both the alliance with American and the merger with Spirit could not both be approved by regulators.
JetBlue did not initially agree, prompting Spirit to urge shareholders to approve Frontier and reject JetBlue.
Although there were several rounds of counter-offers, two events convinced Spirit's board to move forward with JetBlue.
First, a shareholder vote on the Frontier merger appeared to be going against the merger. The board halted the vote before it was completed, anticipating the negative result.
Second, JetBlue submitted a final offer that included "an express obligation to litigate and to divest assets of JetBlue and Spirit up to a material adverse effect on the combined JetBlue-Spirit, with a limited carveout to this divestiture option for actions that would be reasonably likely to materially and adversely affect the anticipated benefits under JetBlue's Northeast Alliance."
In other words, JetBlue would commit to do nearly anything necessary to meet regulatory thresholds for the merger, up to the point of doing anything that would actively hurt the combined airline.
Spirit's board took this to mean that JetBlue had "significant latitude to offer very significant divestitures," and accepted.
JetBlue abandoned the NEA after a judge ruled earlier
A luxury vacation doesn't have to come with a huge carbon footprint — especially if you travel by train.
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“Last April, my wife, Liv, and I took our firstborn, Lyla, from Los Angeles to Taiwan to meet Liv's entire family, which was a really big deal because family is such an important part of Taiwanese culture. Six or seven of Liv's closest relatives brought us to the Shilin Night Market in Taipei, and you know how Asian night markets can get kind of insane. Lyla had this stink face the entire time because she wasn't used to the humidity and the noise and the smells. She was just like, What the hell is this place? But that's the energy of Taiwan: all that commerce, the mom-and-pop shops, the food stalls feeding millions of people every day. My mother-in-law loves bringing us to a stall that does fermented tofu—grilled with all sorts of sauces from spicy to sweet. You can tell the stall is near when you smell that pungent scent permeating the air. It's phenomenal, walking through those night markets. That's Asia to me, those aromas and the loud bustle. As for Lyla, once we got her some fruit, she warmed up to it all. Just take her to a watermelon stall and you've got her. We've traveled a tremendous amount with her since she was a baby, but every stage of traveling with kids as they grow up is totally different. Liv and I have another newborn now, so hopefully we can keep up the trend of showing our girls the world. Taiwan is such a strong cultural reference point for Liv, having grown up there, that we want to pass it on to our kids. It's one of those places that's always going to evolve as time goes on. There will be changes in its future, but that's what Taiwan has endured for ages. Each time we visit, it will have changed, and our family will have changed with it.” —as told to Matt Ortile
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