Spirit Airlines Board of Directors has stated that the offer from JetBlue to acquire the airline in an all-cash transaction “could reasonably be likely to lead to a "Superior Proposal" as defined in Spirit's merger agreement with Frontier Group Holdings, parent company of Frontier Airlines”.
Spirit intends to engage in discussions with JetBlue with respect to the proposal, “in accordance with the terms of the company's merger agreement with Frontier”. Spirit is bound by the terms in the Frontier agreement but the language suggests that it has not yet determined if the JetBlue offer constitutes a superior proposal, this is despite the significant uplift in offer price for the company. Under the terms of JetBlue’s offer, Spirit shareholders would acquire Spirit for $33 per share in cash, implying a fully diluted equity value of $3.6 billion and providing full and certain value to Spirit shareholders. The proposal represents a premium of 52% to Spirit’s undisturbed share price on February 4, 2022, and a premium of 50% to Spirit’s closing share price on April 4, 2022.
Spirit's Board added that it had made no change to its recommendation that its shareholders adopt the merger agreement with Frontier.
Barclays and Morgan Stanley are serving as financial advisors to Spirit and Debevoise & Plimpton is serving as legal advisor.
JetBlue has welcomed the statement from Spirit.
“We are pleased the Spirit Board recognizes the compelling value for all stakeholders that JetBlue has offered,” said Robin Hayes, chief executive officer, JetBlue. “We believe JetBlue is the best partner for Spirit, and we look forward to engaging with the Spirit Board to finalize our combination, to create a national low-fare challenger to the four large dominant U.S. carriers that will result in lower fares and better service for customers. As a combined company, we expect we will be able to deliver superior value on a national scale to customers, crewmembers, communities, and shareholders.”
Goldman Sachs is serving as JetBlue’s financial advisor and Shearman & Sterling is serving as JetBlue’s legal advisor.