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JetBlue makes unsolicited proposal to buy Spirit, threatening Frontier merger


JetBlue Airways is trying to break up pending nuptials between fellow low-fare airlines Frontier and Spirit, offering to buy Spirit in a $3.6 billion all-cash deal. In a direct challenge to its rival, JetBlue said the proposal is a 37% premium over Frontier’s merger offer of cash and stock.

Frontier and Spirit airlines announced plans to merge two months ago, but on Tuesday, Spirit disclosed it received an “unsolicited proposal” from JetBlue for $33 a share. In a statement, Spirit said it will “evaluate JetBlue’s proposal” and do what’s “in the best interests of Spirit and its stockholders.” Spirit shares soared 22% on the JetBlue news before trading was halted.

Either merger would create the fifth largest airline in the nation. Both Frontier and JetBlue have said they want to combine with Spirit to better compete with the “Big Four,” American Airlines, Southwest Airlines, Delta Air Lines and United Airlines.

But mega mergers are getting major pushback from some Democrats in Congress. Senators Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) are among those who last month challenged the Frontier-Spirit merger in a letter to the Justice Department’s Antitrust Division and Transportation Secretary Pete Buttigieg. The senators argued the merger between the “two least-liked airlines in America” would hurt airline competition and bring higher fares to customers.

SIMONE DEL ROSARIO:

JETBLUE AIRWAYS IS TRYING TO BREAK UP IMPENDING NUPTIALS BETWEEN FELLOW LOW-FARE AIRLINES FRONTIER AND SPIRIT.

THE LATTER ANNOUNCED MERGER PLANS TWO MONTHS AGO, BUT THIS WEEK SPIRIT DISCLOSED IT’S NOW RECEIVED AN UNSOLICITED PROPOSAL FROM JETBLUE.

IN A DIRECT CHALLENGE TO RIVAL FRONTIER – JETBLUE OFFERED TO BUY SPIRIT IN AN ALL CASH DEAL FOR 3.6 BILLION. WHICH THEY SAY IS A 37% PREMIUM OVER FRONTIER’S OFFER OF CASH AND STOCK.

SPIRIT SAYS IT’LL “EVALUATE JETBLUE’S PROPOSAL” AND DO WHAT’S “IN THE BEST INTERESTS OF SPIRIT AND ITS STOCKHOLDERS.”

WHILE SPIRIT SHARES SOARED 22% ON THE NEWS.

EITHER MERGER WOULD CREATE THE FIFTH LARGEST AIRLINE IN THE NATION. BOTH FRONTIER AND JETBLUE SAY THEY WANT SPIRIT TO BETTER COMPETE WITH THE “BIG FOUR.”

BUT MEGA MERGERS ARE GETTING MAJOR PUSHBACK FROM SOME DEMOCRATS IN CONGRESS.

SENATORS ELIZABETH WARREN AND BERNIE SANDERS, AMONG OTHERS, WARNED LAST MONTH THAT CONSUMMATING THE SPIRIT-FRONTIER DEAL WOULD HURT AIRLINE COMPETITION AND BRING HIGHER FARES TO CUSTOMERS.

IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.