JetBlue wins battle to buy Spirit with $3.8 billion deal
Spirit Airlines on Thursday agreed to a $3.8 billion takeover offer for low-cost rival JetBlue Airways, ending a protracted battle for the airline whose acquisition would help create the fifth-largest US carrier.
→ JetBlue opens its first destination in Canada.
JetBlue’s victory comes after Spirit called off its $2.7 billion sale to Frontier Group Holdings, but the potential combination is expected to spark a fight with antitrust regulators.
JetBlue’s offer price of at least $33.50 per share represents a nearly 38% premium over Spirit’s latest closing share price. Including a ticking fee, or small monthly payments to Spirit shareholders from January of next year until the deal is completed, the offer could reach $34.15 per share.
Spirit had accepted a $2.9 billion offer from Frontier in February before JetBlue entered the fray in April. Despite better terms from JetBlue, Spirit had pushed for a Bill Franke-backed merger with Frontier, citing antitrust concerns with a possible JetBlue tie-up.
→ JetBlue delays launch of flights between Boston and London.
But he was unable to muster investor support for the deal and was forced to delay a shareholder vote on the proposed acquisition four times. At the latest meeting set for Thursday, Spirit shareholders were expected to vote against a merger with Frontier, Reuters reported.
The result is a setback for Franke, who was instrumental in starting talks with Spirit last year. Franke’s airline-focused firm, Indigo Partners, is one of Frontier’s largest shareholders.
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