Spirit Airlines board urges shareholders to reject JetBlue offer
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2 min read . Updated: 19 May 2022, 06:07 PM IST - Carrier continues to support $2.9 billion tie-up with Frontier
Spirit Airlines Inc.’s board is urging shareholders to reject a hostile takeover bid from JetBlue Airways Corp. and vote in favor of a tie-up with Frontier Group Holdings Inc.
The board said in a statement that the unsolicited $30-per-share offer from JetBlue isn’t in Spirit’s best interest given the substantial regulatory hurdles the deal would face.
The directors are urging shareholders to instead vote for a $2.9 billion merger with Frontier.
Spirit Chairman Mac Gardner said that JetBlue’s offer hasn’t addressed the risk that the deal may not get past the finish line and that doesn’t offer enough protections for Spirit shareholders.
“The proposed combination of JetBlue and Spirit lacks any realistic likelihood of obtaining regulatory approval, while our company faces a long and bleak limbo period as we await resolution," he said in a statement.
Shares of all three airlines fell slightly in premarket trading.
The rival carriers have been playing tug of war over Spirit, which rejected JetBlue’s offer for a $3.6 billion acquisition earlier this month over concerns that the deal would be blocked by antitrust regulators.
JetBlue on Monday launched its hostile takeover attempt for Spirit, taking its case directly to shareholders in an attempt to pressure Spirit management to re-engage in negotiation.
Spirit agreed in February to be acquired by fellow low-cost airline Frontier in a cash-and-stock deal. Both airlines cater to budget-conscious travelers with low base fares and fees for everything else, from bottled water to carry-on bags.
JetBlue later came in with a higher offer, arguing that a combination of JetBlue and Spirit would create a more formidable competitor to the current airline market.
JetBlue has pledged to shed assets to win regulatory approval and pay a $200 million breakup fee if it is unable to complete the proposed deal due to antitrust concerns.
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This story has been published from a wire agency feed without modifications to the text