By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Universal Times MagazineUniversal Times MagazineUniversal Times Magazine
  • Home
  • Industries
    • Automobile
    • Aviation
    • Banking
    • Cryptocurrency
    • E- Commerce
    • EdTech
    • Energy and Petroleum
    • Fintech
    • FMCG
    • Information Technology
    • NBFC
    • Oil
    • Pharmacy
    • Telecom
    • Other Business News
  • Blogs
  • World
  • Jobs
  • Careers
  • About us
  • Privacy Policy
  • Contact
Search
Copyright © 2020-2024 Universal Times Magazine. All Rights Reserved.
Reading: Spirit Airlines board urges shareholders to reject JetBlue offer
Share
Notification
Aa
Universal Times MagazineUniversal Times Magazine
Aa
  • Home
  • Industries
  • Blogs
  • World
  • Jobs
  • Careers
  • About us
  • Privacy Policy
  • Contact
Search
  • Home
  • Industries
    • Automobile
    • Aviation
    • Banking
    • Cryptocurrency
    • E- Commerce
    • EdTech
    • Energy and Petroleum
    • Fintech
    • FMCG
    • Information Technology
    • NBFC
    • Oil
    • Pharmacy
    • Telecom
    • Other Business News
  • Blogs
  • World
  • Jobs
  • Careers
  • About us
  • Privacy Policy
  • Contact
Follow US
  • Home
  • Industries
  • Blogs
  • World
  • Jobs
  • Careers
  • About us
  • Privacy Policy
  • Contact
Copyright © 2020-2024 Universal Times Magazine. All Rights Reserved.

Advertisement

Universal Times Magazine > Blog > Aviation > Spirit Airlines board urges shareholders to reject JetBlue offer
Aviation

Spirit Airlines board urges shareholders to reject JetBlue offer

Gaurav Verma
Last updated: 2022/05/20 at 11:56 AM
Gaurav Verma
Share
5 Min Read
SHARE

Advertisement

Spirit Airlines’ board of directors urged shareholders Thursday to reject a direct appeal from JetBlue Airways to buy all outstanding Spirit stock, calling JetBlue’s moves a “cynical attempt to disrupt” a previously announced merger between Spirit and Frontier Airlines.

Spirit said in a statement that its board had unanimously agreed that taking up JetBlue on its bid, a move known as a tender offer, was not in the best interest of the company or its shareholders. JetBlue issued the tender offer Monday after Spirit rejected a formal acquisition bid in favor of merging with Frontier.

A sale to JetBlue faces substantial regulatory hurdles and is “not reasonably capable” of being completed, Spirit’s board concluded, according to the statement. The board said that a deal was especially unlikely to go through as long as an alliance between JetBlue and American Airlines at airports in the Northeast remained in effect. The Justice Department last year sued to prevent that partnership, citing concerns that it would prevent competition.

Even if JetBlue were to abandon that alliance, an option it has rejected, Spirit said it still had concerns about obtaining regulatory approval. JetBlue, for example, has said that it would remove seats from Spirit’s planes to match its own roomier configuration, which could result in higher rather than lower fares, Spirit’s CEO, Ted Christie, said in an interview Thursday.

“We view that as an extremely negative regulatory story,” he said. “The strategy itself is troubling.”

To address regulatory concerns, JetBlue said it would divest assets from some airports and offered to pay Spirit a $200 million breakup fee if a deal fell through. Frontier has not offered similar concessions. But Spirit on Thursday said JetBlue’s proposal was still unlikely to address the administration’s concerns and described JetBlue’s approach to managing regulatory risk as “cavalier.”

Spirit scheduled a June 10 shareholder vote on the proposed merger with Frontier, which the companies jointly announced in February, before JetBlue countered with its own bid. JetBlue had initially offered $33 per Spirit share and lowered that to $30 in its Monday tender offer. Either bid was more valuable than Frontier’s cash-and-stock offer, which has declined in value since the merger announcement, as Frontier’s share price dropped.

Even if shareholders reject the Frontier merger next month, Christie said Spirit would be unlikely to entertain JetBlue’s current offer.

“They provided us with a proposal early on, in the later part of March, and we spent a month and change reviewing it and reached the conclusion that it was not likely to be consummated,” he said. “If nothing changes, that has been asked and answered.”

- Advertisement -
Ad image

A merger between Spirit and Frontier is widely viewed by airline analysts as a more natural fit because both airlines operate on a similar low-cost model, but with different geographical strengths. But it would still face scrutiny from regulators who have taken an aggressive stance toward antitrust concerns under the Biden administration. Spirit said that the Justice Department last month sent it and Frontier “second requests” for information about the merger, a process that pauses the deal while the companies answer the agency’s long list of questions.

JetBlue has argued that Frontier’s deal carries high regulatory risk.

“Spirit would have you ignore the current regulatory climate to think that approval of their Frontier deal is assured,” JetBlue said in a statement Thursday. “That is simply not true. Both deals are subject to regulatory review, and both deals have a similar risk profile.”

Press the Bell icon for notifications of all new updates

Advertisement

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
[mc4wp_form]
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Gaurav Verma May 20, 2022 May 20, 2022
Share This Article
Facebook Twitter Whatsapp Whatsapp LinkedIn Copy Link
Share
Avatar
By Gaurav Verma
Follow:
Founder
Previous Article Govt set to convert Voda dues to equity by next week
Next Article Ujjivan Small Finance Bank Recruiting for Financial Analyst Position

Stay Connected

2.2k Followers Like
727 Followers Follow
25.7k Followers Follow
444 Subscribers Subscribe

Advertisement

Advertisement

Latest News

Advertisement

Advertisement

Follow US
Copyright © 2020-2025 Universal Times Magazine. All Rights Reserved.
adbanner
AdBlock Detected
Our site is an advertising supported site. Please whitelist to support our site.
Okay, I'll Whitelist
Welcome Back!

Sign in to your account

Lost your password?

Subscribe For Latest Updates

Sign up to best of business news, informed analysis and opinions on what matters to you.

Invalid email address
We promise not to spam you. You can unsubscribe at any time.
Thanks for subscribing!