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JetBlue Jumps After Icahn Discloses 9.91% Stake, Board Talks

(Bloomberg) -- Activist investor Carl Icahn disclosed a 9.91% stake in JetBlue Airways Corp., calling the shares undervalued, and said he’s had talks with management about the possibility of representation on the board.

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The stake, valued at about $204 million based on JetBlue’s closing price, makes Icahn the third-largest shareholder in the carrier, behind BlackRock and Vanguard Group, according to data compiled by Bloomberg.

Shares of JetBlue jumped as much as 19% in extended New York trading. The stock has fallen almost 30% in the past 12 months as federal courts struck down a regional alliance with American Airlines Group Inc. and said a planned $3.8 billion takeover of Spirit Airlines Inc. violated antitrust laws.

JetBlue and Spirit have said they will appeal the ruling, but JetBlue told investors Jan. 30 that it’s also evaluating steps it might take to return to profitability as a stand-alone carrier, including deeper cost cuts, delaying aircraft 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 disclosed in a filing.

The news came the same day that Joanna Geraghty took over as chief executive, 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 JetBlue comment in fifth paragraph.)

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