JetBlue files hostile takeover bid for Spirit Airlines

Terminal A of LaGuardia International Airport for JetBlue and Spirit Airlines in New York.

Leslie Josephs | CNBC

JetBlue Airways filed for a hostile takeover bid for Spirit Airlines on Monday after the carrier rejected JetBlue’s $33 per share cash offer earlier this month.

JetBlue said the acquisition of Spirit will give it access to a large fleet of Airbus aircraft, trained pilots and the ability to better compete with the Big Four US airlines, which control most of the US market. Spirit has turned down an offer to stick with a planned merger with fellow discounter Frontier Airlines, which the two airlines say will allow them to grow and compete more easily.

Any combination would create the country’s fifth largest airline.

On Monday, JetBlue offered Spirit shareholders $30 a share and urged them to vote against the Frontier deal. The company also said that its previous offer of $33 per share is still up if Spirit decides to negotiate. Shares of Spirit closed Friday at $16.98.

“If Spirit shareholders vote against the Frontier deal and force Spirit’s board of directors to negotiate with us in good faith, we will work towards a negotiated deal at $33 per share, subject to information to support it,” JetBlue said.

Spirit’s rejection of JetBlue’s offer last month put the New York airline at a crossroads. JetBlue CEO Robin Hayes said the acquisition of Spirit would “accelerate” its growth.

Earlier this month, Spirit said it rejected JetBlue’s offer because it did not believe the deal would be approved by regulators. It also rejected additional JetBlue terms that could ease regulators’ concerns, including an offer to sell some of Spirit’s assets in Florida, New York and Boston. JetBlue also offered to pay a break fee if the deal didn’t go through.

Transport Minister Pete Buttigieg declined to comment on the deal on Monday and said the DOT would help support any Justice Department review of the deal.

“The most important thing is to make sure that a healthy aviation industry serves the American people well, and part of a healthy aviation sector, part of any healthy sector of our economy, is healthy competition,” he said in an interview with CNBC. Scream box.

Shares of Spirit rose more than 15% in premarket trading on Monday, while shares of JetBlue fell about 1%. Frontier shares rose about 3% in premarket trading. Representatives for Spirit and Frontier did not immediately comment.

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