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/ Wednesday, May 18, 2022
Rebuffed by Spirit, JetBlue goes hostile in takeover bid
Carrier now asking Spirit shareholders to reject Frontier Airlines proposal
J
Michelle Chapman David Koenig, The Associated Press
etBlue 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 negotiating table. 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 question about it,” JetBlue CEO Robin Hayes wrote shares have dropped 30% since, reducing the in a letter. “The Spirit Board based its rejection value of the deal. on unsupportable claims that are JetBlue said its new offer easily refuted.” is lower because of Spirit’s Hayes said JetBlue is offering a unwillingness to share financial significant premium in cash, more information that JetBlue certainty, and more benefits for The bid from Frontier requested. all Spirit investors. He said JetBlue Group Holdings “The Spirit Board failed is confident of winning regulatory Inc. provides less to provide us the necessary approval, and called the Frontier cash but would let diligence information it had bid high risk and low value. Spirit shareholders provided Frontier and then Neither Spirit nor Frontier keep 48.5% of the summarily rejected our responded immediately to requests combined airline. proposal, which addressed its for comment. regulatory concerns, without The bid from Frontier Group asking us even a single 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 Robin Hayes CEO, JetBlue shares of Frontier, based in Denver, climbed more than 6% in midday trading Monday.
In fact,
The Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal.
