Spirit Airlines this week urged its shareholders to reject the unsolicited offer from JetBlue Airways to buy the low-cost carrier for $30 per share in cash.
Spirit’s Board of Directors voted unanimously against the JetBlue offer, telling shareholders that the offer “is NOT in the best interests of Spirit and its stockholders” because of “substantial regulatory hurdles” that would make the deal “not reasonably capable of being consummated.”
In particular, Spirit says that JetBlue’s Northeast Alliance with American Airlines, which was heavily expanded over the past two years particularly out of New York and Boston, will make it incredibly difficult to gain the regulatory approval it would need for the deal to go through.
The deal, despite it being worth substantially more, “is not superior to Spirit’s agreed merger transaction with Frontier,” Spirit said this week.
"JetBlue's tender offer has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders," said Mac Gardner, Chairman of the Board of Directors for Spirit Airlines.
"Based on our own research and the advice of antitrust and economic experts, our view is that the proposed combination of JetBlue and Spirit lacks any realistic likelihood of obtaining regulatory approval, while our company faces a long and bleak limbo period as we await resolution...Our pending merger with Frontier is advancing as planned, and we continue to recommend that Spirit stockholders vote FOR the merger with Frontier on June 10th, as we believe the combination of these two ULCCs is the best way to deliver maximum value to Spirit stockholders."
Spirit also maintained that, despite what JetBlue said earlier this week, its board continues to act “in the best interests of all Spirit stockholders and engaged constructively with JetBlue.” It also said that it believes the offer from JetBlue was a “cynical attempt to disrupt Spirit’s merger with Frontier, which JetBlue views a competitive threat.”
Should the deal with Frontier go through, Spirit says the combined airline will offer more than 1,000 daily flights to over 145 destinations in 19 countries across complementary networks.