The influential shareholder advisory service Institutional Shareholder Services is now advising Spirit Airlines’ investors to vote in favor of a proposed merger with Frontier Airlines over a rival offer from JetBlue Airways, after Frontier increased its offer.
The recommendation, which was delivered on Friday, is a reversal for ISS, which had previously advised Spirit shareholders to vote against a deal with Frontier, a fellow low-cost carrier. It comes during a heated bidding war between JetBlue and Frontier ahead of a Spirit shareholder vote on June 30. Many large investors take ISS’s recommendations seriously when deciding how to vote on corporate proposals, director candidates and other matters.
“Shareholders are best served by taking the deal that provides the best combination of long-term value and compensation in the event of regulatory rejection,” ISS wrote. “On balance, support for the merger with Frontier on the revised terms is warranted.”