Spirit board calls Jetblue proposal arrogant

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Jetblue openly asks Spirit to reject Frontier's offer

After an exhaustive study of Jetblue’s proposal, Spirit’s Board of Directors has rejected it again and recommends that its shareholders continue with Frontier’s proposal, since it considers that an alliance with Jetblue will have no future in the face of the controversial alliance that it maintains. with American (NEA). In addition, he describes as arrogant the way of dealing with regulatory risk.

Spirit concluded that the consummation of the proposed combination of Jetblue, with the NEA in place, seems almost inconceivable, “especially given the cavalier manner in which Jetblue intends to address significant regulatory risk,” the Board said.

“Jetblue’s public offering has failed to address the core issue of significant termination risk and insufficient protections for Spirit shareholders,” said Mac Gardner, chairman of the Spirit Airlines board of directors.

He added that, “Based on our own investigation and the advice of economic and antitrust experts, our view is that the proposed combination of Jetblue and Spirit lacks a realistic chance of obtaining regulatory approval, while our company would face a period of long and grim limbo while we wait for a resolution. In that scenario, a reverse break fee of $1.83 per share won’t come close to adequately compensating Spirit shareholders for the significant business disruption Spirit will face during what Jetblue acknowledges will be a lengthy regulatory process. Our pending merger with Frontier is proceeding as planned,” Garden said.

Furthermore, Spirit does not believe that the Department of Justice (DOJ), or a court, will be persuaded that Jetblue should be allowed to form an anti-competitive alliance that aligns its interests with a legacy (U.S.) airline and then undertake an acquisition that will eliminate to the world’s largest airline ULCC.

However, by insisting on prioritizing its position in the NEA as it pursues a merger with Spirit, Jetblue effectively imposes this increased regulatory risk entirely on Spirit’s shareholders.

Even setting aside the NEA, Spirit believes the Justice Department, and a court, will be very concerned that a Jetblue-Spirit combination would result in a higher cost/higher fare airline that would eliminate a lower cost/higher fare airline. lower tariff and would eliminate about half of the ULCC’s capacity in the United States, Spirit’s Board of Directors said.

Converting Spirit aircraft to JetBlue’s configuration will result in significantly less capacity on former Spirit routes and, as Jetblue has said, will also result in higher prices for consumers.

Jetblue’s proposed divestment of Spirit’s assets in New York and Boston does not address the broader competitive implications of Spirit’s effective merger into Jetblue’s alliance with American.

as reported REPORTUR.usJetblue 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. (Jetblue asks Spirit to reject Frontier’s offer “for high risk”).

Spirit confirmed at the time that “Jetblue has commenced an unsolicited tender offer 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.”

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