The Board of Directors of Spirit Airlines unanimously decided that the tender offer from JetBlue was not in the best interest of the carrier and its stockholders.
The airline's Northeast Alliance deal with American Airlines is under investigation by the Department of Justice, as well as the proposal by JetBlue, which would face substantial regulatory hurdles.
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Stockholders are forced to wait as long as two years for antitrust approval, a dependence on a highly volatile stock market, and questionable debt financing are some of the issues found by the board.
The core issue of the significant completion risk and insufficient protections for Spirit stockholders has not been addressed by the tender offer.
The merger agreement with Frontier Airlines should be voted on by stockholders. The planned merger between the carriers was supported by the Association of Flight Attendants-CWA union.
The vote on the Frontier bid is scheduled for June 10.
The merger with Frontier is progressing as planned, and we recommend that Spirit stockholders vote for it on June 10.
The proxy statement was going to be filed earlier this week by JetBlue urging the shareholders of Spirit to vote against the Frontier acquisition. The officials from Spirit rejected the offer twice.
The board of Spirit is acting in the best interest of the company's stockholders, and the board of JetBlue is looking to disrupt Frontier's attempt to become the fifth largest carrier in the United States, according to the officials of the company.
Rich Tomaselli, an aviation expert from TravelPulse, said that market share is likely the biggest reason behind the offer by JetBlue.
The following statement was issued by JetBlue in response to the recommendation from the board.
It's no surprise that the board gives more of the same to the shareholders. The best interests of its shareholders are being ignored by the Spirit Board, which is focused on protecting their inferior deal with Frontier.
The current regulatory climate would make you think that approval of the Frontier deal is assured. That is not true. Both deals are subject to regulatory review and have the same risk profile. There is great interest in hearing more about our superior offer and the regulatory commitments and protections we have made, including a reverse break-up fee.
Frontier offers less value, more risk, and no regulatory commitments. We are confident that as we continue to share the facts with Spirit shareholders, they will be even more confused than they already are about why the board refused to negotiate in good faith with us. We believe that the Spirit shareholders will vote against the Frontier offer and then tender their shares into our offer.
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