Friday, June 21, 2024
29.4 C
Brunei Town

JetBlue goes hostile in bid for Spirit after two rejections

AP – JetBlue is going hostile in its bid for Spirit Airlines and asking shareholders of the low-cost carrier to reject a proposed USD2.9 billion acquisition by Frontier Airlines.

JetBlue is going straight to shareholders of the Florida airline in hopes of pushing its board to the negotiating table. Shares of spirit jumped 17 per cent before the opening bell yesterday.

Spirit has rejected JetBlue’s USD3.6 billion offer for the Florida budget carrier twice already, saying antitrust regulators are unlikely to approve an offer from the New York City airline because of its alliance with American Airlines in the Northeast. The Justice Department is suing to block that deal.

Shareholders of Spirit Airlines Inc are scheduled to vote on June 10 on the Frontier bid Spirit board.

JetBlue said yesterday that Frontier’s offer is high risk and low value. It made its initial buyout bid for Spirit on April 5, offering USD33 per share in cash.

JetBlue is offering USD30 a share in cash in its tender offer, but would be open to paying its initial offer price of USD33 a share if the board at Spirit enters talks and provides data that JetBlue has requested, the company said. JetBlue said the tender price reflected what JetBlue called Spirit’s unwillingness to share necessary information.

“JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders,” JetBlue CEO Robin Hayes wrote in a letter.

The bid from Frontier Group Holdings Inc would let Spirit shareholders keep 48.5 per cent of the combined airline. It would give Spirit shareholders 1.9126 shares of Frontier plus USD2.13 in cash for each of their Spirit shares.

Shares of JetBlue Airways Corp fell slightly while shares of Frontier’s climbed more than three per cent.

spot_img

Latest

spot_img