Board of directors of Spirit Airlines, Inc. (NYSE: SAVE) has approved the adoption of a limited duration stockholder rights agreement and declared a dividend distribution of one right for each outstanding share of common stock outstanding as of the record date, the company said.
The record date for such dividend distribution is April 9, 2020. The Rights Agreement expires, without any further action being required to be taken by the Spirit Board of Directors, on March 29, 2021.
The adoption of the Rights Agreement is intended to enable all Spirit stockholders to realize the full potential value of their investment in the company and to protect the interests of the company and its stockholders by reducing the likelihood that any person or group gains control of Spirit through open market accumulation or other tactics (especially in current volatile markets) without paying an appropriate control premium.
The Spirit Board of Directors has taken note that in light of the coronavirus and recent market events, the closing price of Spirit´s common stock is 63% below the peak prior to the recent decline. In addition, the Rights Agreement provides the Spirit Board of Directors with time to make informed decisions that are in the best long-term interests of Spirit and its stockholders and does not deter the Spirit Board of Directors from considering any offer that is fair and otherwise in the best interest of Spirit stockholders.
Davis Polk & Wardwell LLP is serving as legal advisor to Spirit.