JetBlue Launches Hostile Takeover Bid for Spirit Airlines

The New York-based airline is appealing to Spirit stockholders to reject a pending deal with Frontier Airlines.

Michael Wildes

Monday, May 16, 2022 at 02:47 PM ET

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[File photo: Shutterstock]

Key Takeaways:

JetBlue has launched a hostile, all-cash tender offer of $30 per share for Spirit Airlines, directly appealing to shareholders after Spirit's board repeatedly rejected its previous merger proposals.
Spirit's board prefers a merger with Frontier Airlines, citing regulatory concerns about JetBlue's offer despite it being a higher upfront cash bid compared to Frontier's $25.83 per share.
Spirit shareholders are scheduled to vote on the Frontier merger on June 10, with JetBlue actively campaigning to convince them to reject the Frontier deal and consider its own higher-value proposition.

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Just weeks after Spirit Airlines’ (NYSE: SAVE ) board rebuffed JetBlue’s (NASDAQ: JBLU) second offer for a merger, the New York-based airline mounted the third attempt to take over the low-cost carrier. This time, JetBlue has gone hostile and is appealing to Spirit’s shareholders in a tender offer to reject the pending Frontier deal and vote instead on JetBlue’s direct offer.

In a statement Monday, JetBlue said it was offering an “all-cash, fully financed tender offer to acquire all of the outstanding shares of Spirit for $30 per share.” Things escalated after JetBlue said Spirit’s board of directors displayed an “unwillingness” to disclose JetBlue’s original offer to shareholders fully. JetBlue charged Spirit’s Board with showing favor to Frontier Airlines (NASDAQ: ULCC ), which initially offered to acquire Spirit in February.