JetBlue turns hostile to buy Spirit Airlines after rejection

CHICAGO / WASHINGTON, May 16 (Reuters) – JetBlue Airways (JBLU.O) Take no answer in their quest to buy rival Spirit Airlines (Save. N).

On Monday, the New York-based carrier launched a hostile bid for an all-cash takeover of Spirit Airlines, two weeks after the low-cost carrier rejected an offer from the bigger competitor.

JetBlue, which offered in early April for $33 per share, is in a Spirit acquisition battle with Frontier Group Holdings (ULCC.O) He argued that the deal would help it better compete with the “Big Four” US airlines that control nearly 80% of the passenger market.

In a letter to Spirit shareholders on Monday, JetBlue offered $30 a share and said it was willing to “negotiate in good faith a consensual transaction at $33, subject to due diligence.”

Spirit rejected the earlier offer, saying the prospect of it winning regulatory approval was slim. Read more

JetBlue revealed Monday that acquiring Spirit “has been a strategic goal for JetBlue for many years,” according to an April 29 letter sent by Spirit.

JetBlue said Monday it had submitted a “Vote No” agency statement urging Spirit shareholders to vote against the planned merger with Frontier, which was up 4% in early trading. Frontier’s cash and stock per share of the discount company on Monday were $19.48 a share recently.

Shares of Spirit were up 8% to $18.32 in early trading. JetBlue shares fell 3.4% to 9.72%

“The Spirit board prioritizes its own self-interest and personal relationship with Frontier over the interests of shareholders,” JetBlue said.

“Ask yourself a simple question: Why doesn’t the spirit of the board interact constructively with us? The interests of Indigo’s Bill Frank partners and the long-term relationships between the two companies are the obvious answer.”

Frontier, Spirit and Frankie did not immediately respond to Reuters requests for comment.

Spirit will hold a shareholder meeting on June 10 to vote on the proposed merger with Frontier. Read more

JetBlue said Monday that on March 29, its CEO Robin Hayes first contacted Spirit CEO Ted Christie to inform him of the airline’s interest in purchasing Spirit.

JetBlue, the sixth largest passenger carrier in the United States, will operate Spirit under the JetBlue brand and does not believe any liquidation is needed, but has promised a $200 million reverse breakup fee, or $1.80 per Spirit share, and plans to liquidate Spirit holdings in New York and Boston. to address any interference.

JetBlue said in April that Spirit sought a much higher reverse breakup fee.

Additional reporting by Rajesh Kumar Singh in Chicago, Tanvi Mehta in Bengaluru and David Shepardson in Washington; Editing by Sriraj Kalovila, David Evans and Lisa Schumaker

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