Spirit Airlines has announced it is in talks with JetBlue about its ongoing pursuit to take over the carrier for US$3.4 billion and expects to provide an answer by the end of June.
In a statement released on Tuesday, Spirit also said Frontier and JetBlue are being given access to the same due diligence information, after JetBlue’s CEO Robin Hayes previously criticised the airline over not “acting in good faith” during the negotiations by withholding important details.
It comes as JetBlue has been fighting to acquire Spirit Airlines for months, in opposition against its merger with similar low-cost carrier Frontier Airlines, announced in February.
Spirit was originally set to make a decision by 10 June, but days before, the company postponed the shareholders’ meeting to continue discussions after JetBlue sweetened its offer by adding an additional US$100 million into its bid for the airline.
“Consistent with its fiduciary duties, Spirit’s board of directors is engaging in discussions with JetBlue with respect to the proposal received on June 6, 2022 and is also continuing to work with Frontier under the terms of the existing merger agreement between Spirit and Frontier,” Ted Christie, president and CEO of the Florida-based carrier.
“The board expects to bring the process to a conclusion and provide an update to stockholders ahead of the special meeting of Spirit stockholders scheduled for Thursday, June 30, 2022.”
The Long Island-based airline said in its new deal it was enhancing its reverse-breakup fee that will be paid to Spirit shareholders, in case the deal falls through and fails to win regulatory approval, to US$350 million – US$3.20 per Spirit share – up from its original price of US$200 million.
It came months after Spirit officially rejected JetBlue’s offer in early May over fears regulators would not approve of the deal due to the controversial Northeast Alliance (NEA) with American Airlines, and the lack of similarities between the companies.
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.
Robin Hayes told Reuters last week that he was “optimistic” a deal will be reached with JetBlue soon.
“We’re pleased that there now seems to be a genuine desire from the Spirit board to engage with us.
“We’re going to continue to engage with the Spirit board over the next few weeks.”