Spirit Airlines Board of Directors has announced today that it has unanimously determined that the unsolicited tender offer from JetBlue Airways to acquire all outstanding shares of Spirit's common stock for $30 per share in cash is NOT in the best interests of Spirit and its stockholders. The board has reiterated its stance that such a deal would not be approved by regulators since “faces substantial regulatory hurdles, especially while the Northeast Alliance ("NEA") with American Airlines remains in effect”. As a result, Spirit states that since the offer is not reasonably capable of being consummated, it is not superior to Spirit's agreed merger transaction with Frontier.
Spirit has recommended that stockholders do not tender any of their shares into the offer and continues to recommend that stockholders vote for the merger agreement with Frontier.
"JetBlue's tender offer has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders," said Mac Gardner, Chairman of the Board of Directors for Spirit Airlines. "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 the announcement from Spirit is also included a comprehensive review of the JetBlue offer where it goes into further detail of the regulatory risk posed by the JetBlue transaction, again noting that JetBlue and American Airlines are being sued by the DOJ for its NEA as anti-competitive. In the document, the Spirit Board has also hit back at suggestions that it is not acting in the best interest of shareholders, stressing that it has “engaged constructively with JetBlue”, detailing a two-hour call with the JetBlue management team to address all of their questions. “Spirit believes JetBlue's proposals and offer are a cynical attempt to disrupt Spirit's merger with Frontier, which JetBlue views as a competitive threat,” reads the announcement. Further compounding the disagreement between the two companies, Spirit Board claimed that “JetBlue's focus on Spirit appears to be an attempt to distract from the fact that JetBlue's own business is in disarray.”
Spirit also opines that JetBlue is placing restrictions on Spirit shareholders from benefitting from the post-pandemic recovery, stating: “JetBlue is asking Spirit shareholders to submit to a cap on their value at $30/share, and be forced to wait for up to two years to receive their cash, while the rest of the industry's shareholders get to participate in a full post-pandemic recovery.”
The industry waits for the next move from JetBlue.