- Spirit’s board turned down JetBlue’s earlier buyout offer of $33 a share.
- Spirit has a deal in place to combine with fellow discount airline Frontier.
- JetBlue launched a hostile takeover attempt of Spirit earlier this week.
Spirit Airlines’ board on Thursday urged its shareholders to reject JetBlue Airways’ hostile takeover attempt, citing regulatory hurdles and accusing the airline of trying to derail its planned merger with fellow discount carrier Frontier Airlines.
“Spirit believes JetBlue’s proposals and offer are a cynical attempt to disrupt Spirit’s merger with Frontier, which JetBlue views as a competitive threat,” Spirit said in a statement.
JetBlue launched its hostile takeover bid on Monday after Spirit earlier this month rebuffed its surprise $33-a-share, all-cash acquisition bid. The tender offer from New York-based JetBlue was for $30 a share. JetBlue also urged Spirit shareholders to turn down the combination with Frontier at a June 10 Spirit stockholder meeting.
JetBlue said Thursday that it is “no surprise that Spirit shareholders are getting more of the same from the Spirit Board,” accusing it of conflicts of interest. JetBlue also said Spirit’s board “continues to ignore the best interests of its shareholders by distorting the facts to distract from their flawed process and protect their inferior deal with Frontier.”
Spirit’s board reviewed that offer and said in a statement Thursday that it determined it “is NOT in the best interests of Spirit and its stockholders.”
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 block JetBlue’s acquisition of Spirit.
“This deal is illusory,” Spirit’s CEO Ted Christie said in an interview with CNBC’s “Squawk Box” on Thursday regarding the JetBlue bid to acquire Spirit. “It will not happen in our opinion and for that reason our board has rejected it and to imply otherwise again, we think is insulting.”
JetBlue said in a statement Thursday that both deals “have a similar risk profile.”
Frontier and Spirit in February announced a $2.9 billion cash-and-stock deal to combine into a discount airline behemoth.
JetBlue says its $3.6 billion all-cash offer would “turbocharge” its growth. 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.
Spirit’s board has said it regulators would approve a tie-up with JetBlue, citing its partnership with American Airlines in the Northeast U.S. The Justice Department sued JetBlue and American over that agreement last year with a trial date set for September.
Spirit shares were down roughly 2% in premarket trading Thursday, while JetBlue shares were fractionally lower.
Source: Business - cnbc.com
