Jetblue has openly asked Spirit shareholders to reject Frontier’s $2.9 billion offer to the low-cost carrier, considering the offer high risk and low value. Likewise, Spirit announced that it will review the offer.
Spirit confirmed Monday that “Jetblue has commenced an unsolicited public offering to acquire all of Spirit’s outstanding common stock at $30 per share in cash and a proxy solicitation opposing Spirit’s merger agreement with Frontier.”
For its part, Jetblue said that “Spirit’s Board failed to provide us with the necessary due diligence information that it had provided to Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us a single question about it,” it reported. Jetblue CEO Robin Hayes in a letter. “The Spirit Board based its rejection on untenable claims that are easily refuted,” Hayes added, according to Travel Weekly.
However, consistent with its fiduciary duties and applicable law, and in consultation with outside financial and legal advisors, Spirit’s board of directors will carefully review Jetblue’s takeover bid “to determine the course of action it believes to be appropriate.” best for their interests and their shareholders. Spirit shareholders are urged not to take any action with respect to the Jetblue public offering at this time until the Board reviews the offering,” Spirit reported.
Spirit has twice rejected Jetblue’s $3.6 billion bid, arguing that antitrust regulators are unlikely to approve a bid by the New York City carrier for its alliance with American Airlines in the Northeast, an alliance that the Department of Justice is suing to dissolve it.
Hayes says Jetblue is offering a significant cash premium, plus certainty and more benefits to all Spirit investors. For its part, the Frontier offer allows Spirit shareholders to own 48.5% with 1.9126 Frontier shares plus $2.13 in cash for each of their Spirit shares.
Jetblue had initially proposed offering $33 per share in cash, then $30 per share in cash, for each share held by Spirit investors. However, he has again offered an initial $33 per share if Spirit’s board enters into negotiations and provides the data Jetblue has requested. It justified that the low price it offers is due to the lack of information requested from Spirit.
as reported REPORTUR.us, Spirit reiterated at the time its merger with Frontier and rejected Jetblue’s offer, as the board of directors unanimously believes that Jetblue’s offer does not constitute a “superior proposition” and also that Frontier represents the best opportunity to maximize value. (Spirit rejects Jetblue’s offer: stays with Frontier).
The Board determined that Jetblue’s proposed divestment is unlikely to resolve the Justice Department’s concerns about a combination of Spirit and Jetblue if the NEA continues to exist. “The DOJ clearly believes that the NEA has a broader national effect, and Spirit believes that the DOJ will not attach much weight to its proposed remedy, especially as there is reason to doubt the effectiveness of similar divestitures as a remedy in past airline mergers.” , they pointed out at the time in the letter they sent to Jetblue.