(Bloomberg) — Activist investor Carl Icahn disclosed a 9.91% stake in JetBlue Airways Corp., calling the stock undervalued, and said he’s had talks with management about the possibility of representation on the board.
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JetBlue shares surged as much as 17% in premarket US trading as Icahn became the third-largest shareholder in the carrier with a $204 million stake, based on Monday’s closing prices.
The move by the 87-year-old former corporate raider amps up pressure on new JetBlue Chief Executive Officer Joanna Geraghty, who takes over following a 30% drop in the shares over the past past 12 months.
Federal courts have upended the company’s growth plans, striking down a regional alliance with American Airlines Group Inc. and blocking JetBlue’s planned $3.8 billion takeover of Spirit Airlines Inc.
JetBlue said last month that it was evaluating steps to return to profitability as a stand-alone carrier, including deeper cost cuts, delaying aircraft deliveries and reworking its flight network.
“We are always open to constructive dialogue with our investors as we continue to execute our plan to enhance value for all of our shareholders and stakeholders,” JetBlue said in a statement after Icahn’s stake was reported in a filing.
JetBlue and Spirit have said they will appeal the ruling, which found that their merger would violate antitrust laws. JetBlue has also warned Spirit that the deal may be terminable, as some aspects of their agreement may not be satisfied.
The disclosure on Monday puts Icahn behind BlackRock and Vanguard Group among JetBlue investors, according to data compiled by Bloomberg. The news came the same day that Geraghty took office following the departure of former CEO Robin Hayes for health reasons.
Also on Monday, Icahn reached an agreement to add two directors to the board of American Electric Power Co., his latest foray into the US power sector.
(Updates with premarket US trading)
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