Spirit Airlines (NYSE: REGISTER) rejected a counter-offer that JetBlue Airways (NASDAQ: JBLU) made last month to its proposed merger with Frontier Airlines (NASDAQ: ULCC) because it believes that “the proposed transaction is not reasonably likely to be completed”.
Spirit said its board “continues to believe that the pending transaction with Frontier represents the best opportunity to maximize value and recommends that Spirit shareholders adopt the merger agreement with Frontier.”
In a statement, Mac Gardner, Chairman of Spirit’s Board of Directors, said: “After careful consideration and extensive dialogue with JetBlue, the Board has determined that JetBlue’s proposal involves an unacceptable level of closeout risk that would be assumed by the shareholders of Spirit. We believe our impending merger with Frontier will open an exciting new chapter for Spirit and provide many benefits for Spirit shareholders, team members and guests.
On February 7, Spirit entered into a merger agreement with Frontier, under which Spirit and Frontier would combine in a stock and cash deal. JetBlue announced its all-cash counteroffer of $33 per common share of Spirit on April 6.
On Monday, JetBlue announced it had amended its offer with terms, including a $200 million reverse break fee that would pay approximately $1.80 per Spirit share “in the unlikely event that the JetBlue transaction is not successful.” not consumed for antitrust reasons”.
Spirit said it will “continue to move toward closing the transaction with Frontier,” which is expected to close in the second half of 2022, pending regulatory review and Spirit shareholder approval. Under the merger agreement, Spirit shareholders would receive 1.9126 Frontier shares plus $2.13 in cash for each Spirit share.