The Spirit Airlines Board of Directors has unanimously recommended that shareholders reject the hostile takeover bid from JetBlue, explaining that JetBlue has misled Spirit shareholders with “inaccurate statements and mischaracterizations.”
Spirit Airlines Board Urges Shareholders To Reject JetBlue Hostile Takeover Offer, Calls It Inaccurate + Misleading
JetBlue’s latest attempt to buy Spirit Airlines bypassed the Board of Directors and went to stockholders, with an offer of $30/share. Almost immediately after the hostile takeover bid, the Spirit Board asked shareholders to wait while it formulated a response, which it has released today. As with JetBlue’s past offers, Spirit Airlines believes that the JetBlue offer will not clear regulatory hurdles nor is it a better offer than that of Frontier, even though more money is offered:
The Board determined that the JetBlue transaction faces substantial regulatory hurdles, especially while the Northeast Alliance (“NEA”) with American Airlines remains in effect, and is, as a result, not reasonably capable of being consummated and is not superior to Spirit’s agreed merger transaction with Frontier.
Mac Gardner, Chairman of the Board of Directors for Spirit Airlines further explained:
“JetBlue’s tender offer has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders. Based on our own research and the advice of antitrust and economic experts, our view is that the proposed combination of JetBlue and Spirit lacks any realistic likelihood of obtaining regulatory approval, while our company faces a long and bleak limbo period as we await resolution. In that scenario, a $1.83 per share reverse break-up fee will not come close to adequately compensating Spirit stockholders for the significant business disruption Spirit will face during what JetBlue acknowledges will be a protracted regulatory process. Our pending merger with Frontier is advancing as planned, and we continue to recommend that Spirit stockholders vote FOR the merger with Frontier on June 10th, as we believe the combination of these two ULCCs is the best way to deliver maximum value to Spirit stockholders.”
In terms of regulatory concern, I believe the Spirit board is correct – this deal faces a huge regulatory barrier since JetBlue essentially wants Spirit Airlines for its parts and labor, not its unique business model.
The Board should continue to emphasize that Spirit (and a combined Spirit and Frontier) represent a true alternative to JetBlue as well as to legacy carriers for cost-conscious travelers.
Spirit Airlines has recommended that shareholders rejects the hostile takeover bid by JetBlue and instead support the merger with Frontier Airlines. The decision now rests with shareholders, who will vote on June 10, 2022 on how to move forward.