Miramar-Based Spirit Airlines Tells Shareholders To Reject Hostile Bid From JetBlue
MIRAMAR (CBSMiami/AP) - Three days after JetBlue went hostile in its attempt to create the world's fifth-largest airline, Spirit Airlines is urging shareholders to reject their offer.
Miramar-based Spirit repeated Thursday that any attempt to merge with the New York carrier would face substantial regulatory hurdles, largely because of JetBlue's alliance with American Airlines in the Northeast. The Justice Department is suing to block that deal.
JetBlue is in "the middle of a merger with American Airlines, one of the big three that they purport to compete with, and then attempting to buy a competitor and take seats out of the market and raise fares and that's going to be a big issue and one that our board viewed as insurmountable," CEO Edward Christie told CNBC.
JetBlue responded Thursday, saying that Spirit's potential deal with Frontier also faces regulatory scrutiny.
"Both deals are subject to regulatory review, and both deals have a similar risk profile," the company said in a statement. "Spirit shareholders recognize that and are showing great interest in hearing more about our superior offer and the regulatory commitments and protections we have made, including a reverse break-up fee."
JetBlue offered to buy Spirit Airlines after a proposed acquisition of that carrier by Frontier Airlines, a deal that Spirit is backing despite a lower offering price.
On Monday JetBlue launched a hostile takeover bid for Spirit, directly asking shareholders of the low-cost carrier to vote down a tie-up with Colorado's Frontier Group Holdings Inc.
The offer Monday from JetBlue was for $30 per share in cash, or more than $3.2 billion, but said its April 5 offer of $33 per share is still available if Spirit enters negotiations.
Spirit's board rejected JetBlue's original $3.6 billion bid on May 2.
Spirit shareholders are scheduled to vote on June 10 on the cash-and-stock offer from Frontier, worth about $2.9 billion when announced in February.
Shares of Spirit fell 2.6% before the market opened, while shares of JetBlue declined slightly.
(© Copyright 2022 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
