New York’s JetBlue and Spirit Airlines LaGuardia International Airport Terminal A.
Leslie Joseph | CNBC
JetBlue said the acquisition of Spirit could increase access to a large fleet of Airbus aircraft, trained pilots, and competitiveness with the controlling “Big Four” US airlines. increase Most of the US market..Spirit rejected the offer to stick to the $ 2.9 billion cash and equity transaction planned to merge with other discounters. Frontier Airlines.. These two airlines say the merger will make growth and competition easier.
Jetblue offered $ 30 a share to Spirit shareholders on Monday, urging them to vote against the frontier deal at a shareholders’ meeting on June 10. The company also said that the previous offer of $ 33 per share was still at the table if Spirit decided to negotiate. Spirit shares closed at $ 16.98 on Friday.
“If Spirit shareholders vote against the transaction with Frontier and force the Spirit Committee to negotiate in good faith, they will receive a $ 33 agreement per share, provided they receive information to support it. We will work towards it, “Jet Blue said.
Both combinations of spirits create the fifth largest carrier in the country.
“We also suggested buying stock at a slightly lower price than the original offer, either because the spirit board did not follow a fair process or because we could not see the” inside “as the frontier allowed. I am. “JetBlue CEO Robin Hayes said in a memo to employees on Monday.
Spirit and Frontier operate similar models with tighter seats, ultra-low fares and all other fares. JetBlue, on the other hand, operates as a more full-service airline with free Wi-Fi, seatback TV and business class on several routes.
Chairman of the Frontier Longtime low cost carrier investor, Was the chairman of Spirit. He retired in 2013 and his investment company, Indigo Partners, acquired Frontier.
JetBlue’s Hayes suggested that a previously created plan to combine Spirit and Frontier has hurt Spirit’s shareholders.
“The total rejection of our offer by the Spirit Board is a nasty sign that they are not in the best interests of shareholders. So what is the Spirit Board thinking? “Haze said in his employee’s memo. “Our guess is that there are many historical and personal relationships between Frontier’s controlling shareholders and some of the Spirit Board members who have agreed to the Frontier deal.”
New York-based airlines said JetBlue’s $ 3.6 billion cash offer last month was rejected by Spirit. intersection.. Mr Hayes said the acquisition of Spirit “supercharges” its growth when there is a high demand for new narrow-body aircraft and there are pilots. Supply shortage..
Spirit said earlier this month that it declined JetBlue’s offer because it did not expect the transaction to be approved by the regulatory agency.Part of that rationale was JetBlue’s partnership in the northeast, he said. American Airlines, The Justice Department appealed to block last year.Spirit CEO said earlier when announcing financial results Early this month “I wondered if it really was their goal to block the deal with the frontier,” he said.
Spirit also rejected additional terms from JetBlue that may have eased regulatory concerns, such as proposals to sell some of Spirit’s assets in Florida, New York, and Boston. JetBlue also offered to pay a $ 200 million reverse split fee if the transaction was not approved by the regulatory agency for antitrust reasons.
Secretary of Transportation Pete Butigeg declined to comment on Monday’s transaction, saying DOT would help the Justice Department analyze the transaction.
“The most important thing is to make sure that the people of the United States are well serviced by the healthy aviation sector, part of the healthy aviation sector, part of the healthy sector of our economy. Is a healthy competition, “he said in an interview with CNBC. Squawk Box. “
In midnight trading on Monday, Spirit’s share price rose by more than 12%, while JetBlue’s share price fell by about 4%. Frontier share rose about 6%, but the wider market was low. Representatives of Spirit and Frontier did not comment immediately.