Spirit Airlines‘ board on Thursday urged its shareholders to reject JetBlue Airways‘ hostile takeover attempt, citing regulatory hurdles and accusing the airline of trying to derail its planned merger with fellow discount carrier Frontier Airlines.
“Spirit believes JetBlue’s proposals and offer are a cynical attempt to disrupt Spirit’s merger with Frontier, which JetBlue views as a competitive threat,” Spirit said in a statement.
JetBlue launched its hostile takeover bid on Monday after Spirit earlier this month rebuffed its surprise $33-a-share, all-cash acquisition bid. The tender offer from New York-based JetBlue was for $30 a share. Spirit’s board reviewed that offer and said in a written statement Thursday that it determined it “is NOT in the best interests of Spirit and its stockholders.”
JetBlue also urged Spirit shareholders to turn down the combination with Frontier at a June 10 Spirit stockholder meeting. JetBlue didn’t immediately comment.
Frontier and Spirit in February announced a $2.9 billion cash-and-stock deal to combine into a discount airline behemoth.
JetBlue says its $3.6 billion all-cash offer would “turbocharge” its growth. All three airlines fly Airbus narrow-body planes, with dozens more on order. Either combination of the airlines would create the fifth-largest U.S. carrier.
Spirit has cast doubt on whether regulators would approve a tie-up with JetBlue, citing its partnership with American Airlines in the Northeast U.S. The Justice Department sued JetBlue and American over that agreement last year with a trial date set for September.
Spirit shares were down roughly 2% in premarket trading Thursday, while JetBlue shares were fractionally lower.
