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Spirit Airlines urges shareholders to reject JetBlue’s tender offer

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A Spirit Airlines airplane taxis for takeoff at Denver International Airport in Denver, Colorado, U.S., on Monday, Feb. 7, 2022.

Michael Ciaglo | Bloomberg | Getty Images

Spirit Airlines’ board on Thursday urged its shareholders to reject JetBlue Airways’ hostile takeover attempt, citing regulatory hurdles and accusing the airline of attempting to derail its planned merger with fellow discount carrier Frontier Airlines.

JetBlue launched its hostile takeover bid on Monday after Spirit earlier this month rebuffed its surprise $33-a-share, all-cash acquisition offer. The tender offer from Latest York-based JetBlue was for $30 a share. JetBlue urged Spirit shareholders to show down the mixture with Frontier at a June 10 Spirit stockholders meeting.

Spirit’s board reviewed that supply and said in a statement Thursday that it determined it “is NOT in one of the best interests of Spirit and its stockholders.”

“Spirit believes JetBlue’s proposals and offer are a cynical try to disrupt Spirit’s merger with Frontier, which JetBlue views as a competitive threat,” Spirit said.

Frontier and Spirit in February announced a $2.9 billion cash-and-stock deal to mix into a reduction airline behemoth. All three airlines fly Airbus narrow-body planes, with dozens more on order.

Either combination of the airlines would create the fifth-largest U.S. carrier.

JetBlue said Thursday that it’s “no surprise that Spirit shareholders are getting more of the identical from the Spirit Board,” accusing it of conflicts of interest. JetBlue also said Spirit’s board “continues to disregard one of the best interests of its shareholders by distorting the facts to distract from their flawed process and protect their inferior cope with Frontier.”

In Spirit’s statement, it said in talks with JetBlue that airline said there “was a 100% certainty” that the Justice Department would seek to dam JetBlue’s acquisition of Spirit.

“This deal is illusory,” Spirit’s CEO, Ted Christie, said in an interview Thursday on CNBC’s “Squawk Box,” regarding the JetBlue bid to accumulate Spirit. “It should not occur in our opinion and for that reason our board has rejected it and to imply otherwise again, we expect is insulting.”

JetBlue said in an announcement Thursday that each deals “have the same risk profile.” JetBlue previously offered to dump Spirit assets in Boston, Latest York and Florida, and pay a $200 million reverse breakup fee if regulators don’t approve the deal.

JetBlue argues its $3.6 billion all-cash offer would “turbocharge” its growth. But Spirit’s board has cited JetBlue’s partnership with American Airlines within the Northeast U.S. as a regulatory hurdle. The Justice Department sued JetBlue and American over that agreement last yr with a trial date set for September.

Spirit shares fell greater than 1% Thursday, while JetBlue’s stock rose greater than 3% and Frontier rose lower than 1%.

Correction: Spirit’s board has said it doesn’t think regulators would approve a tie-up with JetBlue. An earlier version misstated the board’s position.

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