JetBlue now trying hostile takeover in its bid to acquire Spirit Airlines
JetBlue is not giving up on its efforts to acquire Spirit Airlines.
Two weeks after JetBlue's initial acquisition attempt was spurned by Spirit's board of directors, the New York-based airline launched a new, two-part hostile offensive on Monday aimed at Spirit's individual shareholders, its latest proposal to acquire the ultra-low-cost carrier. For its part, Spirit hopes to close a merger deal with Frontier Airlines soon.
First, JetBlue formally urged Spirit's shareholders to reject the carrier's pending merger with Frontier. That deal goes to a formal vote at a special shareholder meeting on June 10. To make its case directly to Spirit's shareholders, JetBlue launched a new website, jetblueoffersmore.com.
JetBlue also launched a tender offer, in which it will offer $30 for each Spirit share that is tendered (sold) to JetBlue directly by Spirit's shareholders. JetBlue's original offer to Spirit's board was $33 a share, and JetBlue promised to increase its tender offer to $33, "subject to receiving necessary diligence" from Spirit.
Two weeks ago, JetBlue prominently noted that Spirit's board stopped cooperating and providing information at some point during their initial negotiations.
While lower than its original offer, JetBlue still views the tender offer as "superior" to the return that Spirit's shareholders will receive if they green-light the merger with Frontier.
"JetBlue offers you $30 per share in cash, representing a 60% premium to the value of the Frontier transaction as of May 13, 2022, a 77% premium to Spirit's latest closing price, and a 38% premium to Spirit's unaffected share price – a very compelling value, and, no matter how you measure it, a higher premium than in our original proposal," JetBlue CEO Robin Hayes wrote in a letter to Spirit's shareholders.
In a letter to Spirit's CEO, Ted Christie, and its board chairman, H. McIntyre Gardner, Hayes claims that JetBlue has trying to acquire Spirit for some time.
"Acquiring Spirit has been a strategic objective of JetBlue for many years and, as such, we were disappointed that the Spirit Board of Directors (the "Spirit Board") elected not to have any discussions with us prior to the announcement of Sprit's transaction with Frontier Group Holdings, Inc. ("Frontier")," Hayes wrote.
More: Spirit Airlines rejects JetBlue takeover bid, will pursue merger with Frontier
Monday's news comes after JetBlue added what it called enhancements to its original offer for Spirit, in the days prior to Spirit's board rejecting the offer.
In a statement, Spirit acknowledged the tender offer and promised to advise its shareholders on its board's position within 10 business days.
Wall Street analysts noted JetBlue's persistence on Monday.
"JetBlue is not giving up," Cowen analyst Helane Becker wrote in a Monday note, while adding that both possible tie-ups require regulatory approval, which is uncertain.
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