JetBlue urges Spirit shareholders to vote against Frontier deal, launch hostile takeover bid By

© Reuters. JetBlue (JBLU) urges Spirit (SAVE) shareholders to vote against Frontier (ULCC) deal, launch hostile takeover bid

JetBlue Airways (NASDAQ: ) announces hostile takeover bid Spirit Airlines (NYSE: ) after the ultra-low-cost airline rejected JetBlue’s $3.6 billion merger deal with Frontier Airlines (NASDAQ: ).

JetBlue Airways is launching an offer to buy shares of Spirit shareholders in an effort to pressure company management to restart talks. Meanwhile, the Long Island City-based airline also asked Spirit shareholders to vote on June 10 against the airline’s merger with Frontier Group.

“JetBlue offers more value to all stakeholders – a significant cash premium – more certainty and more benefit. Frontier is less valuable and more risky, with no divestment commitments and no Reverse break-up fees, despite more overlapping non-stop routes and their own regulatory challenges. However, the Spirit Commission failed to provide us with the necessary due diligence information it provided to Frontier and then immediately rejected our proposal, which Addressed its regulatory issues without even asking us a single question. The psychic committee’s rejection was based on easily refuted unsupported claims,” ​​said JetBlue CEO Robin Hayes.

JetBlue offered $30 a share in cash and said it would be willing to raise that price to $33 a share if Spirit agreed to negotiate and provide the requested data.

“If Spirit shareholders vote against the deal with Frontier and compel Spirit’s board to negotiate with us in good faith, we will enter into a voluntary deal at $33 per share, subject to receiving information in support of it,” Hayes added.

The tender offer will reportedly go into effect on May 16 and run until June 30, adding that JetBlue has begun meetings with certain Spirit shareholders.

Frontier Airlines and JetBlue have been battling for Spirit, underscoring the importance of ultra-low-cost airlines to their growth plans. In addition, a merger with Frontier or JetBlue would also allow the two rivals to challenge other major U.S. airlines and would create the country’s fifth-largest airline.

But Spirit CEO Ted Christie has questioned JetBlue’s actual intentions, saying he doesn’t understand why antitrust regulators would approve the merger while JetBlue continues regulatory scrutiny over its separate deal with American Airlines (NASDAQ: ).

“I wonder if blocking our deal with Frontier was actually their goal,” Christie said.

Senard Karametovich

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