Countering an earlier rejection by Spirit Airlines of an offer to buy Spirit, JetBlue has launched a hostile takeover bid to motivate shareholders of the low-cost airline to reject a proposed acquisition by Frontier Airlines which has offered $2.9 billion. Last month Spirt rejected JetBlue’s earlier $3.6 billion offer at $33 a share, a merger proposal that has drawn anti-trust scrutiny by the Justice Department. The hostile bid offers an all-cash offer of $30 per share.
In a letter to Spirit shareholders, JetBlue said “The Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it. The Spirit Board based its rejection on unsupportable claims that are easily refuted.”
Spirit shareholders will vote on June 10th on the Frontier offer. Shares of Spirt stock jumped 17% as Wall Street exchanges open this morning.