A new suitor appears in what was a foregone merger proposal.
The possible merger between Frontier Airlines and Spirit hit a major snag Tuesday, when Spirit announced that JetBlue has made a $3.6 billion offer for it — out pricing Frontier’s $2.9 billion cash and stock bid.
JetBlue’s approach of Spirit would pay 40% more than Frontier’s offer, with a cash per share offer of $33.
The company confirmed the news to TheStreet.
The deal between Spirit (SAVE) – Get Spirit Airlines, Inc. Report and Frontier (ULCC) – Get Frontier Group Holdings, Inc. Report had been a foregone conclusion, with both budget airlines saying they would do what they could to keep as much staff as possible.
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Why Buy Spirit At All?
When combined, Spirit and Frontier would make the world’s fifth largest airline and would put up a competitive front in an industry still recovering from two years of whipsawing pandemic restrictions.
They had announced the deal in February and Frontier’s bid has since lost some firepower, as Spirit’s stock has wobbled.
But a marriage to JetBlue (JBLU) – Get JetBlue Airways Corporation Report would also boost Spirit’s reach and competitiveness, and news of the possible deal briefly lifted Spirit’s share price before close of trade Tuesday.
Spirit’s board has not yet decided which offer to accept.
What Will Regulators Say?
Either deal would likely draw fire from anti-trust regulators, who have been eyeing the aviation industry for possible monopolies or strategic mergers that make the market less fair.
JetBlue, Spirit and Frontier did not return requests for comment.
