Proxy advisory firm Institutional Shareholder Services (ISS) on Friday recommended shareholders of Spirit Airlines Inc (SAVE.N) vote against the proposed deal with Frontier Group Holdings Inc (ULCC.O).
Spirit had said on Wednesday it plans to delay a shareholder vote on its sale to Frontier Group for a fourth time amid a struggle to gather enough support for a deal that could create the fifth-largest U.S. airline.
ISS reiterated its stance and said the sweetened offer from JetBlue Airways Corp (JBLU.O) was “favorable” for Spirit shareholders. Earlier this week, Frontier had declined to further raise its $2.7 billion bid.
“The prevailing Frontier share price in the time since the transaction was announced does not appear to indicate confidence from market participants that a recovery is on the horizon,” ISS wrote in a report.
Last month, the influential advisory firm had echoed similar thoughts on the JetBlue offer for the ultra-low-cost carrier but at the time had maintained its support for the Frontier deal.
Spirit has been at the center of a heated takeover battle since it first announced a deal with Frontier in February.
Though JetBlue’s $3.7 billion offer is higher, Spirit has repeatedly touted Frontier’s bid, citing higher long-term benefits and fewer regulatory risks compared with JetBlue.
Spirit said it intends to push the special meeting to July 27 from July 15 after Frontier requested to defer the vote.