Spirit Airlines (S64) (SAVE) rejected Jetblue’s takeover counteroffer to its planned merger with Frontier.
Frontier and Spirit Airlines (S64) (SAVE) announced merger plans on February 7, 2022, to create an “aggressive ultra-low-fare competitor” in the US aviation market.
On April 6, 2022, JetBlue (JBLU) submitted an unsolicited $3.6 billion cash takeover bid for Spirit. In an attempt to increase its position, it even added divestiture commitments and a $200 million reverse break-up fee on May 2, 2022.
But this seemingly was not enough to convince the ultra-low-cost airline. In a statement published on May 2, 2022, Spirit announced that it would move forward with the Frontier merger.
“After a thorough review and extensive dialogue with JetBlue (JBLU), the Board determined that the JetBlue (JBLU) proposal involves an unacceptable level of closing risk that would be assumed by Spirit stockholders,” Spirit Chairman Mac Gardner said in the statement. “Spirit continues to believe in the strategic rationale of the proposed merger with Frontier and is confident that it represents the best opportunity to maximize long-term shareholder value.”
Given the potential growth of the combined company, both Frontier and Spirit expect annual revenues to reach approximately $5.3 billion based on 2021.