On Monday JetBlue launched a hostile takeover of Spirit Airlines after its earlier acquisition offer was rejected, the New York-based airline said in a release.
Spirit previously rejected a takeover offer from JetBlue, favoring an earlier deal to merge with fellow budget airline Frontier. The board cited antitrust issues and “an unacceptable level of closing risk” to its shareholders as its reasons for rejecting the JetBlue bid.
JetBlue said in a statement Monday that its offer represented a “60% premium to the value of the Frontier transaction.” The airline added that it was willing to negotiate a $33-per-share deal if Spirit agrees to provide information about its business that JetBlue claims has been withheld.
“JetBlue offers more value, a significant premium in cash, more certainty, and more benefits for all stakeholders,” JetBlue CEO Robin Hayes said in a statement. “Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges.”
Spirit rejected a $33 a share cash offer from JetBlue on April 2, saying that it didn’t believe a merger with the company would be cleared by regulators, and that “given this substantial completion risk, we believe JetBlue’s economic offer is illusory.”
Spirit and Frontier were to combine, the new airline would leapfrog JetBlue and Alaska Air in the number of miles flown by paying passengers, according to 2021 statistics, putting it behind the four major airlines that control about 80% of the nation’s air traffic, American, Delta, United and Southwest Airlines.
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