Spirit board of directors urges stockholders to reject JetBlue tender offer

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Spirit Airlines urged shareholders to reject a hostile bid by JetBlue on Thursday, saying it was “a cynical attempt to disrupt” its merger with Frontier.

JetBlue says its $30 a share offer is superior to the value of Frontier’s cash-and-stock deal and regulatory concerns are not a reason to reject its bid. Shareholders are set to vote on Frontier’s offer, which currently values Spirit at about $20.18 per share, on June 10.

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Spirit questioned JetBlue’s disclosure Monday that acquiring Spirit has been a “strategic” objective for many years, adding that antitrust issues would mean a deal could not be completed.

JetBlue, which in early April offered $33 per share, argues a deal will help it better compete with the “Big Four” U.S. airlines that control nearly 80% of the passenger market.

“During the extensive discussions held between Spirit and JetBlue, JetBlue itself admitted that a lawsuit from DOJ seeking to block the merger was a 100% certainty; therefore, JetBlue would have to prevail or settle (which would be contrary to DOJ’s avowed enforcement approach) in order to consummate its proposed acquisition of Spirit,” Spirit said in a statement.

“JetBlue’s focus on Spirit appears to be an attempt to distract from the fact that JetBlue’s own business is in disarray,” Spirit said on Thursday, adding that its rival’s stock price had fallen about 34% since March 29.

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For its part, Jetblue reacted to the Spirit Airlines Board’s recommendation by saying, “It is no surprise that Spirit shareholders are getting more of the same from the Board of Directors.”

“Spirit’s Board, driven by serious conflicts of interest, continues to ignore the best interests of its shareholders by distorting the facts to distract from its flawed process and protect its inferior deal with Frontier.”

“As far as regulatory approval is concerned, Spirit wants you to ignore the current regulatory climate to think that approval of its deal with Frontier is assured. That is not true. Both transactions are subject to regulatory review, and both have a similar risk profile. Spirit shareholders recognize this and are showing a keen interest in learning more about our superior offer and the regulatory commitments and protections we have made, including a reverse breakup fee, Jetblue added.

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