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JetBlue initiates hostile takeover for new-to-Lambert Spirit Airlines

JetBlue Airways, in competition with the parent of Frontier Airlines, has urged the Miramar, Florida, company's shareholders to vote against the rival deal.
Credit: Spirit Airlines
Spirit Airlines began service last year at St. Louis Lambert International Airport.

FLORIDA, USA — JetBlue Airways has answered the buyout rejection from Spirit Airlines' board with a hostile takeover maneuver.

The New York-based carrier (Nasdaq: JBLU), in competition with the parent of Frontier Airlines, has urged the Miramar, Florida, company's (Nasdaq: SAVE) shareholders to vote against the rival deal. The vote is scheduled to take place June 10.

JetBlue says its bid for Spirit is now $30 a share through an already fully financed proposal to acquire all stock directly from shareholders in what's known as a tender offer. But, it's "fully prepared to negotiate in good faith a consensual transaction at $33" a share.

JetBlue's new offer still represents a premium over that of Denver-based Frontier Group Holdings (Nasdaq: ULCC). Frontier and Spirit agreed Feb. 7 to merge in a deal that valued Spirit at $2.9 billion, with Frontier taking 51% control of the combined company.

JetBlue called Frontier's offer "inferior, high risk and low value" in its Monday appeal to Spirit's shareholders. On a newly created website to Spirit shareholders called JetBlueOffersMore.com, the airline says there is a "clear conflict of interest" when it comes to Frontier's transaction.

The hostile takeover attempt follows a May 2 decision from Spirit's board that rejected JetBlue's unsolicited offer on grounds that it was unlikely to receive regulatory approval.

"JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders," JetBlue CEO Robin Hayes said in a statement on the tender offer. "Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on nonstop routes and their own regulatory challenges."

In its all-cash tender offer, JetBlue would purchase shares of Spirit through subsidiary Sundown Acquisition. Corp. The offer expires at June 30 at 5 p.m.

Click here for the full story on the St. Louis Business Journal's website.


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