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• JetBlue had offered a $3.6 billion cash takeover bid to Spirit
Spirit Airlines Inc (NYSE: SAVE) on Monday rejected takeover bid from JetBlue Airways Corp (NASDAQ: JBLU), saying it will move forward with the merger with Frontier Group Holdings Inc (NASDAQ: ULCC).
JetBlue had offered a $3.6 billion cash takeover bid to Spirit, higher than Frontier’s cash-and-stock offer, valued at $2.9 billion.
Spirit said it has decided to reject the offer as there was too much risk that regulators would bar a merger with JetBlue.
“After a thorough review and extensive dialogue with JetBlue, the Board determined that the JetBlue proposal involves an unacceptable level of closing risk that would be assumed by Spirit stockholders,” Spirit Chairman Mac Gardner said.
Regulators have opposed the merger due to anti-competition concerns. JetBlue has a partnership with American Airlines Group Inc (NASDAQ: AAL) that allows the carriers to coordinate service in the Northeast US to compete against rivals in the crowded airports including New York and Boston.
JetBlue had even pledged to pay a $200 million breakup fee if it was unable to complete the proposed acquisition for antitrust reasons.
Shares of JetBlue rose 2.6% on Monday while Spirit and Frontier shares fell 9.4% and 3.8% respectively.
Picture Credits: Getty Images
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