JetBlue Goes Hostile to Buy Spirit Airlines after Rejection

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May 16. JetBlue Airways Corp (JBLU.O) is not taking no for an answer in its quest to buy rival Spirit Airlines (SAVE.N).
On Monday, the New York-based carrier launched a hostile all-cash takeover bid for Spirit Airlines, two weeks after the ultra-low-cost carrier rejected an offer from the larger rival.

JetBlue, which in early April offered $33 per share, is locked in a takeover battle for Spirit with Frontier Group Holdings (ULCC.O) and has argued a deal will help better compete with the “Big Four” U.S. airlines that control nearly 80% of the passenger market.

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

Spirit said its board will “carefully” review JetBlue’s offer. The company plans to inform shareholders of the board’s decision within 10 business days.

It urged shareholders to take no action on the JetBlue offer at this time.

The Florida-based airline rejected the earlier offer, saying it had a low likelihood of winning approval from regulators.

JetBlue, however, called that argument a “red herring”. It said Spirit’s deal with Frontier faces similar regulatory risk.

Source: Reuters

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121870cookie-checkJetBlue Goes Hostile to Buy Spirit Airlines after Rejection