Spirit-Frontier

A Frontier Airlines aircraft flying over Gloster City, N.J., approaches Philadelphia International Airport, Oct. 22, 2021. Spirit Airlines' board still supports Frontier Airlines' $2.9 billion takeover bid for the airline, saying it determined JetBlue's competing $3.6 billion offer isn't a superior proposal. Last month Spirit said that after speaking with financial and legal advisers, its directors believed JetBlue’s offer could “reasonably” turn out to be the better of the two deals. But on Monday, May 2, 2022 the company announced that it was determined that JetBlue's offer “is not reasonably capable of being consummated." (AP Photo/Matt Rourke)

JetBlue is going hostile in its bid for Spirit Airlines and asking shareholders of the low-cost carrier to reject a proposed acquisition by Frontier Airlines.

JetBlue, in going straight to shareholders with its offer, wants to push Spirit’s board to the negotiatingtable.

On Monday, shares of Spirit, based in Miramar, Florida, jumped 12% in midday trading.

JetBlue pitched a new offer of $30 per share in cash, or more than $3.2 billion, to Spirit stockholders but said its April 5 offer of $33 per share is still available if Spirit enters negotiations.

Spirit’s board rejected JetBlue’s original $3.6 billion bid on May 2, saying antitrust regulators are unlikely to approve an offer from the New York City airline largely because of its alliance with American Airlines in the Northeast. The Justice Department is suing to block that deal.

Shareholders of Spirit Airlines Inc. are scheduled to vote June 10 on the Frontier bid, which is favored unanimously by the Spirit board. The cash-and-stock offer was valued at $2.9 billion when announced in February, but Frontier’s shares have dropped 30% since, reducing the value of the deal.

JetBlue said its new offer is lower because of Spirit’s unwillingness to share financial information that JetBlue requested.

“The Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it,” JetBlue CEO Robin Hayes wrote in a letter. “The Spirit Board based its rejection on unsupportable claims that are easily refuted.”

JetBlue Results

A traveler wearing a protective mask, due to the coronavirus outbreak, walks through the nearly empty JetBlue terminal at Logan Airport in Boston, Friday, May 29, 2020. JetBlue is further dialing back its growth plans after struggling with a high number of canceled flights. The company said Tuesday, April 26, 2022, that it lost $255 million in the first quarter but saw strong demand for travel, which pushed revenue higher. (AP Photo/Charles Krupa)

Hayes said JetBlue is offering a significant premium in cash, more certainty, and more benefits for all Spirit investors. He said JetBlue is confident of winning regulatory approval, and called the Frontier bid high risk and low value.

Neither Spirit nor Frontier responded immediately to requests for comment.

The bid from Frontier Group Holdings Inc. provides less cash but would let Spirit shareholders keep 48.5% of the combined airline. It would give Spirit shareholders 1.9126 shares of Frontier plus $2.13 in cash for each Spirit share.

Either combination involving Spirit would create the nation’s fifth-biggest airline behind American, Delta, United and Southwest.

Frontier and Spirit are similar airlines that offer low fares and get more revenue from tacking on fees for many things. JetBlue is more like the big airlines it hopes to catch. It generally charges higher fares than the discount airlines, but it provides more space between rows and adds amenities, including free TV.

Shares of JetBlue Airways Corp. fell 4% while shares of Frontier, based in Denver, climbed more than 6% in midday trading Monday.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.