Summary
- Carl Icahn’s 9.9% stake increases JetBlue’s stock by 21%, resulting in board representation talks and latest additions.
- Two executives from Icahn Enterprises, Jesse Lynn and Steven Miller, join JetBlue’s board.
- JetBlue goals to return to profitability, faces merger challenges with Spirit Airlines, and CEO Joanna Geraghty plans revenue initiatives.
Earlier this week, billionaire Carl Icahn disclosed a 9.9% stake in JetBlue Airways Corp. The owner of Icahn Enterprises had collected the stocks through a series of purchases over January and February of this 12 months. In consequence of the disclosure, JetBlue’s stock price rose by a whopping 21%.
Icahn said he was in talks with the corporate about having board representation on Monday, February 12. JetBlue offered Icahn seats on the board of directors five days later.
The change
The agreement between Icahn Enterprises LP and JetBlue sees the addition of two executives of Icahn entering JetBlue’s board of directors. Jesse Lynn, the overall counsel of Icahn Enterprises, and Steven Miller, the portfolio manager of Icahn Capital, will take up the 2 seats. Lynn and Miller will act as non-voting observers to the board until JetBlue’s annual stockholders meet this spring, and they’re going to then formally grow to be full voting members.
Photo: Coby Wayne | Shutterstock
The Chair of the JetBlue board, Peter Boneparth, had this to say in regards to the change to the board of directors:
“We’re pleased to have reached this agreement with Icahn Enterprises. Our board and leadership team are focusing our full attention on taking aggressive motion to return to profitability and strengthen JetBlue’s foundation for the longer term. We welcome Jesse and Steven to the board. With their experience on public company boards, often when navigating key inflection points, they may add useful insights as we set JetBlue on a path back to long-term sustainable growth and shareholder value creation.”
With Jesse Lynn and Steven Miller, JetBlue’s board of directors expands to 13 seats, 12 of whom are speculated to be independent. Within the last six years, the airline has shuffled greater than half the board and added eight latest independent directors, which include the 2 additions from the Icahn group.
Icahn’s investment
JetBlue has been attempting to return to profitability after the post-COVID travel surge by cutting costs and becoming a more reliable airline. The attempted merger between JetBlue and Spirit Airlines has also come to a standstill after it was blocked by a judge, who said that the merger would scale back competition and hurt consumers.
Photo: Vincenzo Pace | Easy Flying.
Carl Icahn has said that he feels JetBlue is undervalued. Previously 12 months, JetBlue’s stock was down almost 27% before Tuesday’s rise.
The Chief Executive Officer (CEO) of JetBlue, Joanna Geraghty, spoke in regards to the latest directors, saying:
“We’re already taking motion to revive our historical earnings power. We’re executing greater than $300 million of revenue initiatives this 12 months and are heading in the right direction to deliver significant cost savings from our structural cost program, fleet modernization, and glued cost base reductions. Constructing on our distinct brand and unique value proposition, we’re focused on delivering value to our shareholders and all of our stakeholders, and we welcome the contributions of our latest board members as we move forward with that common goal.”
Photo: Bradley Caslin | Shutterstock
The Icahn Group has agreed to a customary standstill, voting commitments, and other provisions. More information in regards to the agreement between the 2 corporations shall be given to the Securities and Exchange Commission.
Carl Icahn spoke about representation he may have inside JetBlue’s board of directors, saying:
“We appreciate the constructive engagement we now have had with JetBlue’s board and leadership team. We very much sit up for working with them in the longer term.”
Icahn’s investment in JetBlue seems promising and will help the airline.
This isn’t the primary time Icahn has invested in an airline. In the course of the Eighties, he initiated a hostile takeover of Trans World Airlines (TWA) and sold it off after stripping it of assets. The situation isn’t remotely the identical, but it surely’s price mentioning that Icahn’s last foray into the aviation industry wasn’t a positive one.
What do you’re thinking that of Icahn’s involvement in JetBlue? Share your thoughts by leaving a comment!