Spirit Airlines has Rejected Jetblue Airways Takeover Offer

May 2, 2022 By MarketDepth

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Spirit Airlines (NYSE: SAVE) has opted to reject JetBlue Airways (NASDAQ: JBLU) takeover offer, after stating that it was likely not to gain approval from government regulators. Meanwhile, JetBlue took the denial as a chance to better its offer by providing a USD200 Million reverse break-up cost.

“We believe a combination of JetBlue and Spirit (SAVE) has a low probability of receiving antitrust clearance so long as JetBlue’s Northeast Alliance with American Airlines (AAL) remains in existence. Given this substantial completion risk, we believe JetBlue’s economic offer is illusory, and Spirit’s board has not found it necessary to consider it.”

said a letter from Spirit to JetBlue released early Monday

Spirit now intends to finalize a deal with Frontier, a venture that would form the biggest ultra-low-cost carrier and ultimately be able to compete with airlines on a nationwide level. Furthermore, under the deal, Spirit equity holders would be given 1.9126 shares of Frontier, as well as $2.13 in cash per each existing Spirit, share they own.

“Spirit continues to believe in the strategic rationale of the proposed merger with Frontier and is confident that it represents the best opportunity to maximize long-term shareholder value. After a thorough review and extensive dialogue with JetBlue, the Board determined that the JetBlue proposal involves an unacceptable level of closing risk that would be assumed by Spirit stockholders.”

Mac Gardner, chairman of the board of directors for Spirit Airlines