Spirit Airlines Rejects JetBlue’s Buyout Bid and Moves Forward With Frontier

Earlier this year, Spirit agreed to be purchased by Frontier in a stock-and-cash deal valued at $25.83 per Spirit share. Frontier’s stock is now valued at $22.42 per share, down from Friday’s close.

JetBlue made an all-cash offer of $33 per share in March. However, it did not boost that offer price in its Monday statement, referred to as an “enhanced” offer with the $200 million breakup fee as the critical upgrade.

According to Spirit’s letter to JetBlue, the Justice Department is unlikely to authorize a deal in which an ultra-low-cost carrier is purchased by a higher-fare airline, raising customer costs.

According to 2021 data, if Frontier’s acquisition of Spirit goes through, the merged airline will surpass JetBlue and Alaska Air in terms of paid passenger miles flown. It would be the fifth-largest carrier in the world.

“Spirit believes that merging with Frontier will enable the combined ultra-low cost carrier business to achieve scale, improve operational reliability, have increased relevance to consumers, and do an even better job of delivering ultra-low fares to more consumers and competing more effectively against the Big Four carriers, as well as against JetBlue,” said Spirit’s letter to JetBlue Monday.

Spirit’s stock plunged 7% in premarket trade Monday as a result of the news, while Frontier’s stock declined roughly 2%. JetBlue’s stock climbed a slight bit.