JetBlue Makes an All-Cash Bid for Spirit, Could Disrupt Frontier Merger

Proposed deal provides more money for Spirit shareholders, but raises questions of synergy.

Michael Wildes

Wednesday, April 06, 2022 at 04:30 PM ET

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JetBlue's proposal includes $33 per share to Spirit shareholders. [File photo: Adobe Stock]

Key Takeaways:

JetBlue Airways has made a surprise $3.6 billion all-cash offer for Spirit Airlines, valuing shares at $33, aiming to outbid Spirit's previously announced merger with Frontier Airlines.
JetBlue's proposal offers a significantly higher premium (over 50%) compared to Frontier's prior offer ($25.83 per Spirit share), and seeks to create a "gamechanger" airline to better compete with the "Big Four."
Spirit executives consider the offer "unsolicited" but are obligated to present it to shareholders, potentially upending the Frontier deal, despite concerns about integrating two different business models and potential layoffs.

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JetBlue Airways (NASDAQ: JBLU) has made a surprise $3.6 billion all-cash offer for Spirit Airlines (NYSE: SAVE) in a move to supplant a previously announced merger between Frontier Airlines (NASDAQ: ULCC) and Spirit Airlines.

The airline said in a statement that its “superior proposal” of $33 per share to Spirit shareholders would represent a more than 50 percent appreciation on the Spirit share price at the time of the offer on April 4.