JetBlue Hopes Direct Offer Will Convince Spirit Shareholders to Vote Against Frontier Merger
- Barry Adams
- U.S.A. New York City
-
JetBlue took its offer directly to Spirit shareholders and hopes that the lowered $30 a share will convince shareholders to vote against a merger with the rival Frontier Group.
JetBlue took its offer to acquire Spirit Airlines directly to shareholders after the ultra discount carrier rejected its offer for the second time as the low fair takeover saga dragged to the fifth month.
The revised JetBlue's proposal offers $30 a share in cash or values Spirit Airlines for $3 billion.
Spirit agreed to merge with the rival ultra low fare carrier Frontier in a $2.6 billion deal in January and shareholders are expected to vote on the deal on June 10.
Two carriers also have complimentary route networks and the former chief executive of Spirit now runs Frontier.
In April, JetBlue offered $33 a share or $3.3 billion to acquire Spirit but Spirit's board of directors rejected the deal on the worries that the U.S. Department of Justice was unlikely to approve the offer and the deal carried a substantial completion risk.
JetBlue has been pursuing Spirit for a long time and airlines are struggling with pilot shortage exacerbated by Covid-19 pandemic induced layoffs and fewer pilots trained and licensed in the last two years.
The merger of Spirit with either airline will create the fifth largest airline and about 80% of the market is controlled by American Airlines, Delta, United, and Southwest.
In stock trading, Spirit Airlines gained 13.3% to $19.22, JetBlue declined 4.7% to $9.58, and Frontier Group rose 7.4% to $9.37.
The deal structure may change since Frontier stock has fallen from above $14 price when the deal was first agreed in January at $25.83 for each Spirit share.
Annual Returns
| Company | Ticker | 2025 | 2024 | 2023 |
|---|---|---|---|---|
| JetBlue Airways Corporation | JBLU | -6% | 44% | -28% |
| Spirit Airlines Inc. | SAVE | 0% | -82% | -19% |
| Frontier Group Holdings Inc. | ULCC | 2% | 30% | -57% |
| American Airlines Group Inc | AAL | -1% | 25% | -3% |
| Delta Air Lines Inc | DAL | -3% | 51% | 16% |