JetBlue has submitted a competing bid to Spirit Airlines’ board of directors hoping to steer the ultra-low-cost carrier away from its merger deal with Frontier Airlines.
Under its proposal, JetBlue would acquire Spirit for $3.6 billion, or $33 per share in cash, which it said was a 50% premium to Spirit’s April 4 closing share price. and a “superior proposition” to the merger deal with Frontier announced in February. Frontier’s offer was approximately $2.9 billion in cash and stock.
JetBlue CEO Robin Hayes said in a statement that the acquisition would be a game-changer for the carrier’s ability to compete domestically. Combined with Spirit, JetBlue’s fleet would be 455 aircraft with 312 Airbus aircraft on order and would bring new destinations to JetBlue’s network, including St. Louis; Memphis; Louisville, Kentucky; Atlantic City, NJ; Myrtle Beach, SC; and four destinations in Colombia.
“While JetBlue and Spirit are different in many ways, we also have a lot in common, including a focus on keeping our costs low so we can grow profitably and provide an attractive alternative to mainstream airlines. of the “Big Four”, according to Hayes. “We would conduct a comprehensive review of Spirit’s product offering, operational and customer technology and talent pool to optimize the combined airline.”
In a statement, Spirit acknowledged the “unsolicited proposal” and said it “will work with its financial and legal advisors to evaluate JetBlue’s proposal and pursue such course of action as it determines to be in the best interests of Spirit.” and its shareholders”.
Frontier, meanwhile, argued that its offer, which it had hoped to complete in the second half of this year, was “in the best interest of consumers and shareholders”. A Frontier spokesperson said a JetBlue-Spirit merger would draw more antitrust attention from the US Department of Justice, which is already challenging its partnership with American Airlines.
“Unlike the compelling Spirit-Frontier combination, an acquisition of Spirit by high-fare carrier JetBlue would result in more expensive travel for consumers,” the Frontier spokesperson said. “In particular, the significant East Coast overlap between JetBlue and Spirit would reduce competition and limit options for consumers.”