JetBlue’s Deal for Spirit Is Not Done Yet

JetBlue’s deal to buy Spirit Airlines is not completely done just yet.

JetBlue on Monday started a hostile all-cash takeover bid for Spirit, filing a “Vote No” letter that urged Spirit shareholders to vote against the Frontier deal at the upcoming special meeting.

The news comes just a couple of weeks after Spirit announced it was rejecting the JetBlue deal, in favor of a less lucrative offer from Frontier, because of regulatory concerns.

The carrier told Spirit shareholders that it was offering $30 per share in cash and was also ready to “negotiate in good faith a consensual transaction at $33,” which is significantly more (60% more according to JetBlue) than what Frontier is offering (close to $19 dollars a share as of Monday morning).

“JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders. Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges,” JetBlue CEO Robin Hayes said in the letter.

“Yet the Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it. The Spirit Board based its rejection on unsupportable claims that are easily refuted."

“Based on the clear superiority of our offer, we expected the Spirit Board to engage constructively. Given its unwillingness to share necessary information or negotiate in good faith, we adjusted our price accordingly, but will work towards a consensual transaction at $33 per share, subject to receiving the information to support it,” the letter reads.

The future of Spirit is now left to its shareholders who will now vote on the merger with Frontier on June 10. If the merger with Frontier goes through, the combined passenger count from 2019 would have put the merged company at about the same passenger count as JetBlue, which is currently the 6th largest carrier in the U.S.