JetBlue launches hostile takeover bid for Spirit Airlines

JetBlue Airways launched a hostile takeover bid of Spirit Airlines on Monday after that carrier turned down JetBlue’s $33 per share, all-cash offer earlier this month.

JetBlue has said acquiring Spirit would give it access to a large fleet of Airbus planes, trained pilots and the ability to better compete against the “Big Four” U.S. airlines that control most of the U.S. market. Spirit rejected the offer to stick with a planned merger with fellow discounter Frontier Airlines, which those two airlines say would allow them to grow and compete more easily.

Either combination would create the country’s fifth-largest carrier.

JetBlue on Monday offered Spirit shareholders $30 a share and encouraging them to vote against the Frontier deal. The company also said its earlier offer of $33 per share is still on the table if Spirit decides to negotiate. Spirit’s shares closed Friday at $16.98.

“If the Spirit shareholders vote against the transaction with Frontier and compel the Spirit Board to negotiate with us in good faith, we will work towards a consensual transaction at $33 per share, subject to receiving the information to support it,” JetBlue said.

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

Spirit earlier this month said it turned down JetBlue’s offer because it didn’t believe the deal would be approved by regulators. It further turned down additional terms from JetBlue that might have eased regulatory concerns, including an offer to divest some of Spirit’s assets in Florida, New York and Boston. JetBlue also offered to pay a reverse breakup fee if the deal fell through.

Transportation Secretary Pete Buttigieg declined to comment on the deal Monday and said the DOT would help support any Justice Department analysis of a deal.

“The most important thing is to make sure the American people are served well by a healthy airline sector, and part of a healthy airline sector, part of any healthy sector in our economy, is healthy competition,” he said in interview with CNBC’s “Squawk Box.”

Spirit shares were up more than 15% in premarket trading Monday, while JetBlue’s were down roughly 1%. Frontier shares were up about 3% premarket. Representatives for Spirit and Frontier didn’t immediately comment.