What do you get when you cross airlines? There are delays

Four times, the shareholder vote on the proposed merger with Frontier has been delayed.

The board believes antitrust regulators are more likely to approve the deal. Both companies are low-cost carriers and would continue that together. They can save consumers money. The airline is giving more money. The latest all-cash offer by the airline values the company at $33.50 a share, which includes the assumption of debt, and a so-called "ticking fee mechanism" that would compensate shareholders for a long delay in the regulatory approval process. Based on recent trading prices, Frontier's stock-and-cash bid is about $25 a share.

There is an antitrust perspective to both transactions. The airline industry is already highly consolidated and US politicians are more likely to be skeptical of additional combinations when fares are high but delays and cancellation are common.

The sales pitch is complicated by concurrent efforts to fend off a US Department of Justice lawsuit over its marketing alliance with American Airlines group Inc. If the deal falls apart, a portion of the merger consideration would be paid out as a special dividend and wouldn't have to be paid back.

Frontier is willing to pay a $350 million reverse terminated fee, which is similar to the one offered by JetBlue. Frontier said in a letter that its current offer is the final one.

Everyone seems to be waiting for someone to blink. There are antitrust risks that Frontier wants to be taken into account when voting on the matter. The opportunity was created by the pre-paid dividend that was dangled by the airline. If the deal falls apart and the shareholders agree to sell to Frontier, they could pocket the prepayment and wait for that to happen. If the current terms weren't "best and final", the carrier would have an easier time selling the Frontier deal. The shareholder message should be taken into account when the vote is delayed, says the airline.