Update: Please see the most recent development in this story: Spirit Terminates Frontier Merger, Will Move Forward With JetBlue.
Spirit Airlines is all-in on its planned merger with Frontier Airlines after a surprise bid from JetBlue Airways.
The airline’s board of directors said that it had “unanimously determined” that JetBlue’s proposal did not constitute a “superior proposal” and that it would work to complete a transaction with Frontier.
Here’s what you need to know.
Spirit Reiterates Support for Merger With Frontier Airlines
Back in February, Spirit announced that it would merge with Frontier, another low-cost carrier.
The merger of the 2 airlines would see an expansive route network, covering more than 100 destinations in 19 countries across the U.S., the Caribbean, and Latin America.
But early last month, JetBlue threw its hat in the ring to acquire Spirit, offering a $3.6 billion bid — or about $33 per share. JetBlue had hoped to disrupt a market dominated by the Big 4 airlines, which include American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines.
“Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue has shown it’s possible to have both,” JetBlue CEO Robin Hayes said at the time.
However, it appears Spirit isn’t interested.
Spirit’s board said that it continued to believe the pending transaction with Frontier “represents the best opportunity to maximize value.”
“After a thorough review and extensive dialogue with JetBlue, the Board determined that the JetBlue proposal involves an unacceptable level of closing risk that would be assumed by Spirit stockholders,” said Mac Gardner, the board’s chairman, in a statement.
“We believe that our pending merger with Frontier will start an exciting new chapter for Spirit and will deliver many benefits to Spirit shareholders, Team Members and Guests,” the statement continued.
The deal is still expected to close in the second half of 2022.
Frontier has said that the deal would bolster service to underserved communities across the U.S., Latin America, and the Caribbean.
The planned merger was expected to add 10,000 direct jobs by 2026.
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It’s clear that Spirit Airlines believes Frontier has a better offer than JetBlue, with the airline saying that doing business with JetBlue would involve “an unacceptable level of closing risk.” So it appears that the window on that bid has closed.
Still, we’re a few months out from the deal between Spirit and Frontier closing, so we’ll learn more specifics about how a loyalty program, earning structure, and credit card benefits will work.
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