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JetBlue Taps Icahn’s Lynn and Miller for Board
JetBlue (NASDAQ:JBLU) has made a significant and somewhat controversial move by appointing Jesse Lynn, the general counsel of Icahn Enterprises, and Steven Miller, the portfolio manager of Icahn Capital, to its board of directors.
The decision follows reports indicating that activist investor Carl Icahn was on the brink of securing two board seats at JetBlue Airways (JBLU) after disclosing his nearly 10% stake on Monday.
Post-revelation, shares saw a marginal uptick of 0.72% in extended trading.
According to a separate statement from the airline, Lynn and Miller will initially act as non-voting observers on the board until JetBlue’s (JBLU) annual stockholder meeting this spring, after which they will fully assume their roles as voting members of the board.
In response to this development, Carl Icahn remarked, “We appreciate the constructive engagement we have had with JetBlue’s board and leadership team. We very much look forward to working with them in the future.”
The move comes after JetBlue (JBLU) shares surged by 22% in reaction to Icahn’s stake revelation, with the activist investor citing the airline as “undervalued” and hinting at the possibility of securing a board representation. However, JetBlue shares tumbled 2.9% on Friday in a subsequent setback.
An analyst at Citi suggested that Icahn might consider capital deployment opportunities for JetBlue (JBLU) if the anticipated $3.8 billion acquisition of Spirit Airlines (SAVE) falls through.
JetBlue (JBLU) encountered a major obstacle in its pursuit of acquiring Spirit (SAVE) last month, as a federal judge halted the merger on antitrust grounds. Despite the ongoing appeals process, the consensus among experts is that overturning the lower court’s decision will be an uphill battle.
Commenting on Icahn’s approach, Citi analyst Stephen Trent, who holds a neutral rating on JetBlue (JBLU) and a $5.50 price target, highlighted Icahn’s earlier investment in the now-defunct TWA Airlines in the 1980s, providing a context for prudence in evaluating his latest moves.
Upon the inclusion of Lynn and Miller following the annual meeting, the company’s board will expand to 13 directors, with the expectation that 12 of them will be independent.
