Spirit Advises Shareholders Not To Act On New JetBlue Offer Yet

Today has been a whirlwind involving JetBlue and Spirit Airlines, with JetBlue’s CEO Robin Hayes writing an open letter to Spirit’s shareholders and proposing a new merger deal, and Spirit asking its shareholders to take no action for the time being. What is all the commotion about?

Spirit tells shareholders to wait

Spirit Airlines confirmed that JetBlue Airways had commenced an unsolicited tender offer to acquire all outstanding shares of Spirit’s common stock for $30 per share in cash and a proxy solicitation opposing Spirit’s merger agreement with Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc.


JetBlue has made two offers to buy Spirit after being rejected the first time. Photo: Lukas Souza | Simple Flying

Consistent with its fiduciary duties and applicable law, and in consultation with outside financial and legal advisors, the Spirit Board of Directors (the “Board”) will carefully review JetBlue’s tender offer to determine the course of action that it believes is in the best interests of Spirit and its stockholders. Spirit stockholders are urged to take no action with respect to the JetBlue tender offer at this time pending the Board’s evaluation of the offer.

The airline also states that it will inform its stockholders of the board’s formal position within 10 business days by filing a schedule 14D-9 with the Securities and Exchange Commission (SEC) and making it available to shareholders. Schedule 14D-9 is a filing made by the target company, with the SEC, in response to a tender offer made by an interested party and is required whenever a significant portion of shares will be sold.

Spirit’s financial advisors are Barclays and Morgan Stanley & Co. LLC, and its legal advisors are Debevoise & Plimpton LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP.

JetBlue plans hostile takeover of Spirit Airlines

Earlier today, a letter that was written by the CEO of JetBlue, Robin Hayes, to the shareholders of Spirit Airlines was released. The letter explained that JetBlue still intends to buy Spirit Airlines and criticized Frontier’s offer, stating that Frontier’s offer has similar regulatory risks but no shareholder protections.

Spirit plans to formally advise its board in 10 business days of its position regarding the new offer from JetBlue. Photo: Vincenzo Pace | Simple Flying

To read more about JetBlue’s new offer to purchase Spirit, click here.

In the letter, Robin Hayes wrote,

“Ask yourself a simple question: why won’t the Spirit Board engage with us constructively? ​​The interests of Bill Franke’s IndiGo Partners and the long-standing relationships between the two companies is the obvious answer.”

JetBlue is very intent on buying Spirit Airlines as this is the second offer the airline has made in recent months, the first was rejected by Spirit. Time is running out for JetBlue to take action as Spirit Airlines recently announced that its board will be voting about the proposed Frontier merger on June 10, in just under a month’s time.

In April, JetBlue made Spirit an all-cash offer that valued Spirit at $3.6billion, 57% above Spirit’s April 5 share price. This offer was a significant increase compared to Frontier’s offer to buy Spirit. Frontier’s offer was valued at $2.9million and was a stock and cash offer. Spirit has already made an announcement that its board plans to unanimously vote in favor of the merger with Frontier, and JetBlue does not seem well positioned to acquire Spirit.

Simple Flying has contacted Spirit and request a statement and additional information. At the time of publishing, we have not received a response, but will update the article if we receive one.

What do you think of JetBlue’s latest offer? Which airline should Spirit merge with?

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