JetBlue becomes hostile in its offer for Spirit after 2 rejections | Economic news
By MICHELLE CHAPMAN, AP Business Writer
JetBlue turns hostile in its bid for Spirit Airlines and asks the low-cost carrier’s shareholders to reject a proposed $2.9 billion acquisition by Frontier Airlines.
JetBlue is reaching out directly to shareholders of the Florida airline in hopes of pushing its board of directors to the negotiating table. Spirits shares jumped 17% before the opening bell on Monday.
Spirit has already twice rejected JetBlue’s $3.6 billion bid for the budget Florida carrier, saying antitrust regulators are unlikely to approve a bid from the New York-based airline because of its alliance with American Airlines in the northeast. The Justice Department is suing to block that deal.
Spirit Airlines Inc. shareholders are due to vote on June 10 on Frontier’s bid favored by Spirit’s board of directors.
JetBlue said Monday that Frontier’s offer was high risk and low value. It made its initial bid for Spirit on April 5, offering $33 per share in cash.
JetBlue is offering $30 per share in cash in its tender offer, but would be willing to pay its initial offer price of $33 per share if Spirit’s board begins talks and provides the data requested by JetBlue , the company said. JetBlue said the offer price reflected what JetBlue called Spirit’s reluctance to share necessary information.
“JetBlue delivers more value – a significant cash bonus – more certainty and more benefits for all stakeholders,” JetBlue CEO Robin Hayes wrote in a letter.
Frontier Group Holdings Inc.’s offer would allow Spirit shareholders to retain 48.5% of the combined airline. This would give Spirit shareholders 1.9126 shares of Frontier plus $2.13 in cash for each of their Spirit shares.
Shares of JetBlue Airways Corp. fell slightly while shares of Frontier climbed more than 3%.
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