The shareholder vote referring to Spirit’s merge with Frontier Group Holdings was delayed again today, giving hope to investors that a higher bid could come from JetBlue Airways.

Investors reacted by sending shares of Spirit up as much as 5% in Friday trading.

What is going on

In February, Spirit and Frontier announced plans to merge in what seemed at the time a routine deal.

JetBlue entered the fray a few months later with a cash offer significantly higher than Frontier’s, triggering a bidding war for Spirit.

The most recent postponement occurred last night. The Spirit company announced Friday morning that it would adjourn its shareholder meeting with plans to reconvene on July 15, giving parties another week for negotiations.

So what?

Right now, it’s too early to say whether Spirit’s board is considering the JetBlue offer or simply worried that it doesn’t have enough votes to close the Frontier deal. Regardless of how it plays out, investors respond positively to the development and expect a higher price.

As a result, Spirit investors would receive a 40% higher payout at closing if JetBlue successfully secured a deal.

Investors should be warned that Spirit’s board was likely right to predict a more rigorous regulatory review in the case of a JetBlue/Spirit merge. 

We would still be a long way from receiving the full payout.

The Spirit stock is currently trading well below JetBlue’s offer of $33.50 per share but is gradually rising as the negotiations progress.