Spirit Airlines’ board of directors has recommended that its shareholders reject a $30 per share tender offer from JetBlue Airways, arguing the takeover bid “has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders.”

“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, ” Spirit Airlines board chairman Mac Gardner said in a statement. “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.”

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The recommendation comes after Spirit already rejected JetBlue’s initial proposal to acquire the company for $33 per share.


Spirit said a potential combination with JetBlue would result in a “higher-cost/higher fare airline that would eliminate a lower-cost/lower fare airline and remove about half of the ULCC capacity in the United States.”

It also cited concerns about JetBlue’s “Northeast Alliance” with American Airlines. The Department of Justice is currently seeking to block the arrangement, alleging the NEA is anticompetitive.

In addition, Spirit warned that its shareholders would be subject to “significant risk from fluctuating market conditions and stock market volatility” under JetBlue’s tender offer and that the company’s debt financing for a possible acquisition of Spirit “remains questionable.”


Spirit argues that JetBlue’s previous proposal and tender offer are “a cynical attempt” to disrupt its $2.9 billion merger with Frontier, which it says JetBlue views as a “competitive threat.”

Frontier and Spirit expected their combined company to produce $1 billion of consumer benefit and synergies derived from more flying on existing assets and deliver annual revenues of roughly $5.3 billion and annual run-rate operating synergies of $500 million once the merger is completed.

The combined airline would add new routes and offer more than 1,000 daily flights to over 145 destinations in 19 countries across complementary networks, according to Spirit.

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“It’s no surprise that Spirit shareholders are getting more of the same from the Spirit Board,” JetBlue said in a response to the Spirit board’s recommendation. “The Spirit Board, driven by serious conflicts of interest, continues to ignore the best interests of its shareholders by distorting the facts to distract from their flawed process and protect their inferior deal with Frontier.”

JetBlue said that Frontier’s deal offers “less value, more risk, and no regulatory commitments, despite a similar regulatory profile.”

“We are confident that as we continue to share the facts directly with Spirit shareholders, they will be even more perplexed than they already are about why the conflicted Spirit Board has refused to negotiate with us in good faith,” the company added. “We believe that the Spirit shareholders will make their views known by voting against the Frontier offer and tendering their shares into our offer.”

Spirit stockholders will vote on the Frontier merger during the company’s shareholder meeting on June 10.