JetBlue made a $3.6 billion bid to buy Spirit Airlines, in what the company believes “constitutes a superior proposal under Spirit’s merger agreement with Frontier and represents the most attractive opportunity for Spirit’s shareholders,” according to a press release.
The proposal comes two months after Spirit Airlines and Frontier Group announced a definitive merger agreement on Feb. 7, under which the companies will combine in a deal valued at $6.6 billion, “creating America’s most competitive ultra-low fare airline,” as GOBankingRates previously reported.
Following the announcement, Spirit shares soared, closing the day up 22%. Shares were down 3% in pre-market trading on April 6.
JetBlue’s proposal to acquire Spirit is for $33 per share in cash and represents a premium of 50% to Spirit’s closing share price on April 4, 2022, the company said in the release.
The combination of the two airlines would position JetBlue as the most compelling national low-fare challenger to the four large dominant U.S. carriers by accelerating JetBlue’s growth and expanding the reach of the “JetBlue Effect,” which occurs when legacy carriers react to JetBlue’s unique combination of low fares and award-winning customer service with lower fares, the company added.
“Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue has shown it’s possible to have both,” Robin Hayes, JetBlue CEO, said in the release. “When we grow and introduce our unique value proposition onto new routes, legacy carriers lower their fares and customers win with more choice. The combination of JetBlue and Spirit – coupled with the incredible benefits of our Northeast Alliance with American Airlines – would be a game changer in our ability to deliver superior value on a national scale to customers, crewmembers, communities, and shareholders. The transaction would accelerate our strategic growth and create sustained, long-term value for the stakeholders in both companies.”
As for Spirit, it said in a statement that its Board of Directors “will work with its financial and legal advisors to evaluate JetBlue’s proposal and pursue the course of action it determines to be in the best interests of Spirit and its stockholders. The Board will conduct this evaluation in accordance with the terms of the Company’s merger agreement with Frontier and respond in due course. Spirit shareholders do not need to take any action at this time.”
The transaction would allow JetBlue to grow in its focus cities like Los Angeles, Fort Lauderdale, Orlando, and San Juan, as well as in “legacy hubs,” including Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami.
In addition, the combination would introduce JetBlue for the first time to new destinations, including St. Louis; Memphis, Tenn.; Louisville, Ky., Atlantic City, N.J.; Myrtle Beach, S.C.; and four additional destinations in Colombia, the company said in the release.
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