Spirit says no to JetBlue acquisition offer, again

May 19, 2022

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Spirit Airlines is asking its shareholders to reject a hostile bid by JetBlue to acquire the company and instead back its merger with Frontier Airlines.

It’s the second time in as many weeks that Spirit has rejected an offer by JetBlue.

The move comes after JetBlue on Monday announced a $30 per share tender offer to acquire Spirit’s outstanding shares. In a tender offer, an acquiring company approaches individual shareholders and offers to purchase their holdings at a premium. Spirit’s shares closed at $19.42 on Wednesday.

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“JetBlue’s tender offer has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders,” Mac Gardner, Spirit’s board chairman, said in a statement.

In rejecting the hostile bid on Thursday, Spirit laid out a number of its concerns, primarily related to regulatory approval and anti-trust matters. Analysts believe that JetBlue’s Northeast Alliance with American Airlines presents a major regulatory challenge for any deal with Spirit, though JetBlue has promised to divest itself of Spirit’s northeast assets — but not necessarily its own alliance with American — if it acquires the latter. Regulatory approval for Spirit’s deal with Frontier is also uncertain, but many believe it has better chances than the JetBlue one.

It’s a point that JetBlue highlighted in its own statement responding to Spirit’s rejection.

“Regarding regulatory approval, Spirit would have you ignore the current regulatory climate to think that approval of their Frontier deal is assured,” JetBlue said. “That is simply not true.”

JetBlue’s original offer had been for $33 per share, and in its hostile bid, JetBlue had promised to increase its offer from $30 to $33 if Spirit started sharing more information with JetBlue. It seems likely that won’t happen.

More: JetBlue now trying hostile takeover in its bid to acquire Spirit Airlines

In a Thursday appearance on CNBC’s “Squawk Box,” Spirit CEO Ted Christie strongly rejected the assertion that it wasn’t sharing enough information with JetBlue.

“Well [JetBlue CEO] Robin [Hayes] and I have spoken over the last month,” Christie said. “And yes, I am frustrated by the commentary because to imply that our board didn’t go through its diligence is a misstatement, and quite frankly it’s insulting.”

Spirit’s merger deal with Frontier now goes to Spirit’s shareholders, who will vote on it on June 10 — a vote that JetBlue is strongly urging the shareholders to vote against.

Featured photo by Zach Griff/The Points Guy.

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