JetBlue launches hostile takeover bid for Spirit Airlines

JetBlue Airways on Monday launched a second bid to buy Spirit Airlines, weeks after Spirit’s board of directors rejected the initial bid, saying it was unlikely to win approval from regulators.

In making the move, JetBlue said in a regulatory filing that Spirit’s board of directors has “refused to meaningfully engage with us with respect to our proposal to acquire all outstanding Shares for $33.00 per Share in cash.” The carrier had made an initial offer in April and later revised it.

Under the current proposal, JetBlue is offering $30 per share, but said in the filing it would work to meet the original $33 per share “if the Spirit Board decides to constructively engage with us.”

Earlier this month, Spirit’s board said it would reject JetBlue’s offer and instead move forward with its pending merger with Frontier Airlines.

“JetBlue offers more value—a significant premium in cash—more certainty, and more benefits for all stakeholders,” JetBlue chief executive Robin Hayes wrote in a letter to the company’s shareholders. “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.”

Spirit did not respond to a request for comment early Monday.

In announcing that Spirit would reject JetBlue’s offer, Mac Gardneririt $200 million if the deal fell through—Spirit’s leadership concluded the Frontier merger was the best path forward., chairman of Spirit’s board of directors, wrote that even after reviewing an updated proposal from JetBlue—which included the offer to pay Sp

Gardner wrote that the prospect of rejection by federal authorities, in part because of ongoing concerns centered on an alliance between JetBlue and American Airlines, made the offer too risky.

“The Board determined that the JetBlue proposal involves an unacceptable level of closing risk that would be assumed by Spirit stockholders,” Gardner said in a statement at the time. “We believe that our pending merger with Frontier will start an exciting new chapter for Spirit.”

JetBlue was the fifth-busiest carrier before the pandemic, with 43 million passengers in 2019, while Spirit ranked eighth, according to Transportation Department data. Frontier was the ninth-largest airline.

In making its case to Spirit’s board, JetBlue said it expects “to be able to obtain the necessary regulatory clearances in roughly the same time frame from entering into a definitive agreement as the proposed transaction with Frontier.”

Frontier has said it hopes to complete the merger in the second half of this year.

Analysts say a merger of any of the two carriers could create an airline with the scale and routes to more effectively compete with the nation’s four largest air carriers. While a merged JetBlue and Spirit would be larger, a Spirit-Frontier combination would vault into JetBlue’s fifth-place spot—a prospect that might have motivated JetBlue’s bid.

While a Spirit-Frontier merger needs to be reviewed by the Justice Department, industry analysts have said it is not likely to prompt significant concern. Spirit said in a memo to employees Monday that the review was under way and proceeding as expected.