Spirit Airlines: JetBlue’s Higher Takeover Bid Is Just Too Risky for Shareholders
Photo Credit: Spirit Airlines offered its most forceful public comments yet on why it is rejecting JetBlue's offer and choosing to merge with Frontier. Flickr / Phil Taylor
Skift Take
Spirit Airlines thinks any potential merger with JetBlue would fall afoul of regulators. The risk just isn't worth it to Spirit, which underscored its commitment to Frontier's initial bid.
In some of their most forceful public comments yet, Spirit Airlines executives explained why the company’s board rejected an unsolicited merger offer from JetBlue Airways in favor of the Frontier Airlines deal already in the works.
To evaluate JetBlue’s offer, Spirit’s board looked at two criteria: Whether regulators would approve the deal, and if so, would it benefit Spirit’s shareholders. JetBlue’s $3.6 billion all-cash offer is, on its face, more financially rewarding for Spirit’s shareholders, but Spirit’s board didn’t even get that far, CEO Ted Christie told analysts during the company’s first-quarter earnings call on Thursday.
Instead, the board stopped at whether the deal had a reasonable chance of being consummated and decided it didn’t. JetBlue currently is under the U.S. Justice Department’s (DOJ) microscope for its alliance with American Airlines on flights along the East Coast. The DOJ last year sued to block the northeast allia
