JetBlue Raises Offer for Spirit to $33.50 a Share

JetBlue Airways increased its takeover bid for Spirit Airlines to $33.50 on Monday in an attempt to persuade the ultra-low-cost carrier to accept it over competitor Frontier Airlines’ offer. Last week, Spirit announced that it was in negotiations with about their offer and that a decision will be made by June 30. JetBlue offer provides a 68 percent premium above the indicated value of the Frontier stock and cash deal, according to the company.

The revised plan involves a “stronger divestment pledge” from JetBlue to complete the Spirit transaction, but it does not require relinquishing  Northeast Alliance partnership with American Airlines. Spirit’s board of directors postponed a special meeting when shareholders were expected to vote on a proposed merger with Frontier Airlines less than two weeks ago. The date for the meeting is set for June 30.

Spirit stated at the time that the postponement would allow its board more time to talk to its shareholders, as well as Frontier and JetBlue  updated offer is the result of such discussions, according to Robin Hayes, the company’s CEO. Spirit stated in a statement that it had received the new proposal and that its board of directors will analyse it with its financial and legal experts. Before its special shareholders meeting, the airline stated it will deliver an update.

Frontier Airlines executives said they had no reaction late Monday. Spirit’s board earlier dismissed JetBlue approach, claiming that federal authorities were unlikely to authorise a merger between the two airlines. Instead, the airline has pressed ahead with plans to merge with Frontier Airlines.