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Spirit says it will consider JetBlue's offer, setting up showdown with Frontier

April 08, 2022
3 min read
Spirit says it will consider JetBlue's offer, setting up showdown with Frontier
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Spirit Airlines said late Thursday that it would enter talks with JetBlue regarding the latter's surprise bid from JetBlue to acquire the ultra-low-cost carrier, setting the stage for a potential upset to a landmark merger deal between Spirit and Frontier.

In a press release, Spirit said that its board had decided to "engage in discussions" with the New York-based JetBlue following consultations with its financial and legal advisors. The board determined that JetBlue's offer could constitute a "superior offer" as defined by its previous merger agreement with Frontier.

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"Spirit intends to engage in discussions with JetBlue with respect to JetBlue's proposal, in accordance with the terms of the Company's merger agreement with Frontier," the airline said in the release. "Spirit remains bound by the terms of the merger agreement with Frontier, and Spirit's Board has not determined that JetBlue's proposal in fact constitutes a Superior Proposal as defined in the merger agreement with Frontier."

"In addition, Spirit notes that there can be no assurance that the discussions with JetBlue will result in a transaction," the airline added. "Spirit shareholders do not need to take any action at this time, and Spirit's Board has made no change to its recommendation that its shareholders adopt the merger agreement with Frontier."

Now what? Does JetBlue’s bid for Spirit put its American Airlines partnership at risk?

JetBlue's "unsolicited" bid, which was made public on Tuesday, would see the airline acquire Spirit for about $3.6 billion in cash, or $33 per share. Frontier's offer, which involves both cash and stock, was valued at about $25 per share.

Typically in a situation where a company has multiple bids, it has a fiduciary duty to accept the offer that's best for shareholders, which is usually — but not necessarily — the highest offer, according to one lawyer specializing in mergers and acquisitions, who asked not to be identified because he was not involved with the airline transaction.

Related: Skepticism on Wall Street as details emerge on JetBlue’s bid for Spirit

The proposed merger with Frontier, which was announced in February, is largely seen as more straightforward, allowing the two airlines to expand their network while saving money on operations. The offer from JetBlue has been viewed with more skepticism, with the airline framing the takeover as a way to acquire new aircraft and expand its network faster than it would otherwise be able to. Analysts have pointed to potential regulatory objections to such a deal, as well as high costs for JetBlue to retrofit Spirit's aircraft in order to offer customers a consistent product.

Featured image by Photo by David Slotnick/The Points Guy
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases
  • Intro Offer
    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

    Earn 80,000 ThankYou® points
    60,000 points
  • Annual Fee

    $95
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent, Good

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases