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Acquire Spirit-NYSE SAVE rejects

JetBlue Submits a Revised & enhanced proposal to Acquire Spirit-NYSE SAVE rejects!

On 2nd May 2022 at 7:39 AM EST, JetBlue announced that it had improvised the proposal that it made earlier to the Board of Directors at Spirit Airlines. This proposal was made to acquire all of the Spirit’s outstanding common stock for 33 USD cash on every single share. With this offer, JetBlue has put forward a proposal that provides a superior financial value to the shareholders at Spirit.

However, Spirit Airlines rejected this proposal and continued the deal with Frontier instead. Travelers can face a great change of procedures after the merger. But the response by JetBlue is still in rumors.

Key Headlines

  • Spirit Airlines refuted the previous JetBlue offer and announced that they are sticking with the deal to join with Frontier.
  • JetBlue executives shared that the Spirit Airlines take-over could have helped in their speedy growth.
  • The Board of Directors at Spirit have announced that they’ll proceed with their existing agreement of merger with Frontier.

JetBlue’s Significant Action towards the Closure of the deal

JetBlue has continued its pursuit of disruption of the Spirit-frontier merger. Meanwhile, the airline has a strong partnership with American Airlines under the NEA(Northeast-Alliance).

JetBlue also contended that joining hands with Spirit will make it further fulfilled. Moreover, JetBlue is nearly at a Quarter-century crossing. After 22 long years, JetBlue had put its sights on South Florida with its surprise bid for acquiring Spirit Airlines. 

After Spirit Airlines rejected the offer by JetBlue for a 3.6 billion all-cash acquisition, their stock price fell over 9%, whereas to JetBlue, it was still good news as theirs rose more than 2%.

Revised All-Cash Offer- An Overview

  • The 33 USD per share cash offer represents a 52 percent premium to the undisturbed share price of Spirit on February 4, 2022, and a 50% premium to their closing price on April 4, 2022
  • Travelers shouldn’t choose between cheap fares and great experiences, JetBlue’s accelerated growth will allow the combined airline to serve more customers in more locations.
  • The ‘JetBlue Effect’ is more effective than ultra-low-cost airlines at introducing competition and driving down traditional airline fares.
  • The merger will provide job growth and crew opportunities, increase commitment to Florida and New York, as well as expand the reach of JetBlue’s sustainability efforts.
  • Shareholders to benefit from JetBlue’s improved financial strength and accelerated revenue growth and profitability, expected to generate $60-$700 million in operating synergies and accretive earnings per share in the first year
  • Combining JetBlue and Spirit with such incredible benefits will undoubtedly be a game changer for both the passengers and the company. In short, Shareholders will receive a superior value as per the national scale as well as it will be a prior benefit for crewmembers and the communities.

JetBlue’s Aim Crushed???

According to JetBlue, the JetBlue-Spirit combination might have led to major competition with the big four US airlines. With this new low-fare airline opposing the Big Four, their 80% control could be challenged. 

Despite falling hard, JetBlue has continued to operate toward building profitability again. However, JetBlue’s bid on Spirit Airlines wasn’t their first attempt to acquire a major carrier organization. In 2016 they even lost a bid to Alaska to acquire Virgin America. 

Although this wasn’t the reason that led to rejection, Spirit had a counter offer for JetBlue against their bid, where they asked to abandon NEW with American. But JetBlue being the noblest, denied this alternative.

JetBlue CEO Mr. Robin Hayes wrote a letter to Spirit Airline’s CEO, “We affirm that accepting our proposal will best interest your stockholders. It has greater odds for helping achieve regulatory clearance on a stronger commitment by our part as compared to Frontier.

Moreover, Dissenting to common misperceptions, JetBlue has greatly less overlap with Spirit regarding flights, seats, and ASMs than Frontier has. Especially in the metropolitan areas served by both. So, it’s their loss rather than JetBlue’s.

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