In February, Frontier Airlines announced that it was buying its low-cost carrier, Spirit Airlines, under a $ 2.9 billion deal in cash and shares. But Frontier’s hopes of an easy acquisition were shattered a couple of months later, when JetBlue made an unsolicited $ 3.6 billion cash offer to acquire Spirit if it withdrew from the merger with Frontier.
But Spirit is resisting the Frontier deal.
Now, JetBlue is going straight to Spirit’s shareholders, CNN reports, trying to convince them to vote against the Frontier deal, as it presents a $ 30-per-cash cash offer. JetBlue said in a statement Monday that it offered a “60% premium on the value of the Frontier transaction,” adding that it is willing to negotiate if Spirit discloses more information about its business.
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Frontier’s January bid valued each Spirit share at $ 25.83.
Spirit cites antitrust regulation as a major barrier to finalizing a deal with JetBlue. Spirit rejected JetBlue’s $ 33 per share cash offer on May 2, saying that in light of the “substantial risk of termination, we believe JetBlue’s economic offer is illusory.”
If the Frontier-Spirit merger were to take place, the new carrier would surpass JetBlue in size and customer base, becoming the fifth largest carrier in the country.
JetBlue Airways Corporation has dropped nearly 24% month-on-month, while Frontier Communications Parent Inc has dropped nearly 20% during the same period.
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