JetBlue launches hostile takeover bid for Spirit Airlines
JetBlue Airways on Monday announced a hostile takeover bid for smaller rival Spirit Airlines, two weeks after a previous bid was rejected.
The offer is all cash.
JetBlue, which is battling Frontier over the acquisition of Spirit, argued that the deal would spur competition with the four largest US airlines, which control nearly 80% of the passenger market.
In a letter to Spirit shareholders on Monday, JetBlue offered $30 a share and said it was ready to “negotiate in good faith a $33 consensual transaction, subject to due diligence.”
Spirit rejected the earlier offer, arguing that the transaction had a low probability of getting regulatory approval.
JetBlue has filed a “vote no” proxy statement asking Spirit shareholders to speak out against the potential business combination with Frontier.
JetBlue said that “Spirit’s board is prioritizing its own interests and personal relationships with Frontier over the interests of its shareholders.”
Frontier and Spirit did not immediately respond to Reuters requests for comment.
JetBlue said that on March 29, its Chief Executive Robin Hayes called Spirit Chief Executive Ted Christie for the first time to inform him of the airline’s interest in buying Spirit.
JetBlue, the sixth-largest US passenger carrier, would operate Spirit under the JetBlue brand and doesn’t believe divestments are necessary, but has promised a fee of $200 million if the deal doesn’t go through, or $1.80 per share. Spirit.
The company still plans to sell Spirit’s stakes in New York and Boston to resolve any overlap.
Spirit sought a significantly higher separation rate in April, JetBlue said.