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Spirit rejects JetBlue's offer, saying it wants less lucrative deal with Frontier [View all]
https://www.cnn.com/2022/05/02/investing/spirit-rejects-jetblue-offer/index.html
New York (CNN Business)Spirit Airlines said it will stick with its deal with Frontier Airlines, rejecting a more lucrative competing offer from JetBlue Airways.
The airline said it doesn't believe regulators would allow JetBlue to buy Spirit.
"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," said a letter from Spirit to JetBlue released early Monday. "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."
JetBlue announced Monday that it was offering Spirit a $200 million break-up fee if the deal is not completed for antitrust reasons. But a spokesperson from Spirit said the company's board rejected the break-up fee offer, too.
In February, Spirit agreed to a deal with Frontier (FRNT). Despite the airlines referring to their proposed combination as a merger, it is Spirit shareholders who would be bought out, receiving a stock-and-cash deal valued at that time at $25.83 for each Spirit share. Given Friday's closing value of Frontier's stock, it is now worth a bit less — $22.42 a share.
In April JetBlue announced an all-cash offer of $33 a shares. It did not raise that offer price in what it referred to as an "enhanced" offer in its Monday statement, with the $200 million break-up fee being the primary addition.
New York (CNN Business)Spirit Airlines said it will stick with its deal with Frontier Airlines, rejecting a more lucrative competing offer from JetBlue Airways.
The airline said it doesn't believe regulators would allow JetBlue to buy Spirit.
"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," said a letter from Spirit to JetBlue released early Monday. "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."
JetBlue announced Monday that it was offering Spirit a $200 million break-up fee if the deal is not completed for antitrust reasons. But a spokesperson from Spirit said the company's board rejected the break-up fee offer, too.
In February, Spirit agreed to a deal with Frontier (FRNT). Despite the airlines referring to their proposed combination as a merger, it is Spirit shareholders who would be bought out, receiving a stock-and-cash deal valued at that time at $25.83 for each Spirit share. Given Friday's closing value of Frontier's stock, it is now worth a bit less — $22.42 a share.
In April JetBlue announced an all-cash offer of $33 a shares. It did not raise that offer price in what it referred to as an "enhanced" offer in its Monday statement, with the $200 million break-up fee being the primary addition.
This feels like a race to the bottom. I've been disappointed with JetBlue recently and their reviews have gotten worse this past year.
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