JetBlue (JBLU) has once again stepped up its efforts to win over Spirit Airlines (S64) (SAVE) by offering an enhanced deal, claiming that its proposal is “superior” to the offer made by rival Frontier.
The New York-based airline has offered to pay a $350 million fee to Spirit if the merger is blocked due to competition concerns, JetBlue (JBLU) said in a statement dated June 6, 2022. The airline has also agreed to pre-pay $150 million “promptly following Spirit shareholder approval” to proceed with JetBlue (JBLU).
“JetBlue (JBLU) would bring the best of Spirit’s people and culture to a combined airline as it seeks to create a national low-fare challenger to the Big Four,” JetBlue (JBLU) outlined in the statement.
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 was not enough to convince the ultra-low-cost airline, as the offer was rejected.
JetBlue (JBLU) did not give up and launched a hostile takeover deal, launching a $30 a share all-cash offer on May 16, 2022, and urging Spirit shareholders to vote against a merger with Frontier. But Spirit reiterated its support for a deal with Frontier and declared on May 19, 2022, that it “is NOT in the best interests of Spirit and its stockholders” to proceed with JetBlue’s (JBLU) offer.
“Based on our own research and the advice of antitrust and economic experts, our view is that the proposed combination of JetBlue (JBLU) and Spirit lacks any realistic likelihood of obtaining regulatory approval, while our company faces a long and bleak limbo period as we await resolution,” Mac Gardner, Chairman of the Board of Directors for Spirit Airlines (S64) (SAVE) commented in a statement dated May 19, 2022.