JetBlue is being hostile in its bid for Spirit Airlines and is asking the low-cost carrier’s shareholders to decline a proposed $2.9 billion takeover by Frontier Airlines.
JetBlue, going straight to shareholders with its proposal on Monday, wants to push the Spirits board to the negotiating table.
Shares of Spirit, based in Miramar, Florida, jumped 13% in afternoon trading.
JetBlue made a new offering of $30 per share in cash to Spirit stockholders, but said that if Spirit enters negotiations, the previous offer of $33 per share is still available.
Spirit’s board rejected JetBlue’s $3.6 billion offer on May 2, saying antitrust regulators are unlikely to approve the New York City airline’s proposal, mainly because of its alliance with American Airlines in the Northeast. Is. The Justice Department is suing to block that deal.
Spirit Airlines shareholders are scheduled to vote on the Frontier bid unanimously endorsed by the Spirit Board on June 10.
JetBlue said Monday that Frontier’s offering is high risk and low value. It made its initial buyout bid for Spirit on April 5, offering $33 in cash per share.
JetBlue said Monday that the new, lower offer is based on Spirit’s reluctance to share the information requested by JetBlue.
“The Spirit Board failed to provide us with the necessary due diligence information that Frontier had provided and then summarily rejected our proposal,” JetBlue CEO Robin Hayes wrote in a letter, which raised a single question about it. without asking, addressed its regulatory concerns.” “The Spirit Board bases its disapproval on unsupportable claims that are easily refuted.”
Hayes said JetBlue is offering a significant premium, greater certainty and greater leverage in cash for all spirit investors. He said JetBlue is confident of getting regulatory approval.
Frontier Group Holdings’ bid offers less cash, but will let Spirit shareholders hold 48.5% of the combined airline. It will give Spirit shareholders 1.9126 shares of Frontier and $2.13 in cash for each Spirit share.
Any combination involving Spirit would make it the fifth largest airline in the country, behind American, Delta, United and Southwest.
Frontier and Spirit are similar airlines that offer lower fares and get more revenue from handling fees for many things. JetBlue is the kind of big airlines that are expected to catch on. It typically charges higher fares than discount airlines, but it offers more space between lines and added perks, including free TV.
Shares of JetBlue fell 4% while shares of Denver-based Frontier climbed more than 6%.