Carl Icahn to Get Two Seats on JetBlue’s Board
JetBlue Airways announced Friday that two independent directors would join its board as part of a deal with activist investor Carl Icahn.
Jesse Lynn, the general counsel of Icahn Enterprises, and Steve Miller, a portfolio manager at Icahn Capital, will join JetBlue’s board as non-voting observers during the carrier’s annual shareholder meeting in the spring. After the meeting, Lynn and Miller will join JetBlue’s board as full voting members.
Icahn reported a nearly 10% stake in JetBlue on Monday, saying in a regulatory filing he believed the company’s stock was undervalued.
“We appreciate the constructive engagement we have had with JetBlue’s board and leadership team,” Icahn said. “We very much look forward to working with them in the future.”
Earlier on Friday, JetBlue and Icahn were reportedly nearing a settlement to avoid a proxy fight, according to The Wall Street Journal. The two board seats were part of that settlement.
JetBlue and Icahn also reached a deal on a customary standstill, voting commitments, and other provisions as part of the agreement, according to a filing Friday.
Icahn’s stake in JetBlue marks his first activist campaign since short seller Hindenburg Research accused the activist investor of running a “Ponzi-like” scheme to pay dividends, according to Reuters. The attack hindered Icahn’s ability to make new bets and caused him to lose billions of dollars in net worth.
JetBlue has been struggling to turn a profit after losing its merger with Spirit and the Northeast Alliance. S&P Global Ratings downgraded JetBlue’s credit rating on Thursday, citing financial performance that had “weakened considerably.”
New JetBlue CEO Joanna Geraghty said the carrier’s main focus is restoring profitability, with or without a Spirit merger. Part of her plan to bolster JetBlue’s finances includes increasing capacity on popular leisure routes and cutting costs.
“Building on our distinct brand and unique value proposition, we are focused on delivering value to our shareholders and all of our stakeholders, and we welcome the contributions of our new board members as we move forward with that common goal,” Geraghty said in a statement.
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