There is a major change when it comes to the future of Spirit Airlines. In February of 2022, it was announced that Frontier Airlines was going to acquire Spirit Airlines. In April 2022, the airline made a bid to acquire the airline in what they said was a superior proposal.
There is an update, as Spirit Airlines has rejected the proposal from JetBlue. The offer was increased moments later by JetBlue.
The main reason for this determination is that Spirit has concerns about the transaction.
There are regulatory concerns about an ultra low cost carrier being brought and the Northeast Alliance with American Airlines being reviewed by the DOJ.
Mac Gardener is the chairman of the board of directors of Spirit.
“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. We believe that our pending merger with Frontier will start an exciting new chapter for Spirit and will deliver many benefits to Spirit shareholders, Team Members and Guests.”
The transaction is expected to close in the second half of 2022. This is subject to customary closing conditions, including the completion of regulatory reviews and approval by Spirit shareholders.
After Frontier was announced, JetBlue increased its offer.
The airline argues that it offers a 47-52% premium to the value of the Frontier transaction.
I am happy to see that Spirit is going with Frontier, as I don't think it would be good for consumers.
The Frontier takeover bid will be moving forward, while the JetBlue takeover bid will be rejected. The main reason that the board of directors of Spirit doesn't consider the offer to be superior is because they have concerns about getting regulatory approval for the deal.
In the event that the merger doesn't get approved for antitrust reasons, JetBlue increased its offer to include a $200 million reverse break-up fee.
What do you think about the new deal between Frontier and Spirit?