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Spirit again rejects JetBlue bid

written by Adam Thorn | June 30, 2022

An A320 Neo in Spirit livery (Spirit)

Spirit Airlines has knocked back JetBlue’s latest offer to acquire it, again citing antitrust concerns.

It has instead asked shareholders to back a bid from low-cost rival Frontier Group Holdings at a meeting on Thursday.

The three budget airlines have been involved in an acquisition ‘love triangle’ for months as JetBlue and Frontier seek to create America’s fifth-largest airline that could challenge the country’s legacy carriers.

JetBlue’s new offer included a ticking fee of 10 cents per Spirit share, raising the deal value to $34.15 per share. It represents a huge 51 per cent premium to the airline’s Monday closing price.

Rival Frontier’s bid, meanwhile, was valued at just $22.03 per share.

“The latest offer from JetBlue does nothing to address our Board’s serious concerns that a combination with them would not receive regulatory approval,” Spirit CEO Ted Christie said.

“That unsolved issue, combined with the fact that their offer is still substantially below the potential $50 per share or more of value that we expect will result from a merger with Frontier, affirms our analysis that our merger agreement with Frontier provides more value and certainty to our stockholders.

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“While we have engaged with JetBlue for weeks and provided them a level playing field on which they could make their best offer, unfortunately they have now turned to scurrilous rhetoric instead of a substantive improvement in their offer.

“We are focused on proceeding with our agreement with Frontier, and we appreciate the continued support of ISS and Glass Lewis as well as the feedback from many stockholders who intend to vote in support of the transaction.”

It cames after Spirit rejected JetBlue’s offer in early May over fears regulators would not approve of the deal due to the Northeast Alliance (NEA) with American Airlines, and the lack of similarities between the companies.

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The partnership, which allows the airlines to sell each other’s flights and provide benefits to loyal members began in 2020. But the Department of Justice in September last year sued the NEA because it eliminates competition in New York and Boston by diminishing JetBlue’s cheaper prices against American.

JetBlue, however, disputed those fears and said that the NEA litigation, which is slated for September, would “not be an obstacle” to the acquisition of Spirit, and would not “impact” shareholders in any way, even if the company lost the trial.

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