JetBlue Airways Corp has emerged victorious in the long-drawn takeover battle with Spirit Airlines Inc. as the latter agrees to a $3.8 billion buyout deal from the former. The deal would result in the creation of the fifth-largest airline in the United States. Although JetBlue is reveling in the taste of success, probable opposition from the anti-trust regulators is expected. The green flag for JetBlue came after Spirit canceled the earlier $2.7 billion deal with Frontier Group Holdings. Read along to know more about the acquisition.
The What And How
The long-drawn takeover battle between JetBlue and Spirit started back in April and it has finally come to an end. Only time can tell if it is a happy ending or not because there are still many tangles to be sorted out. JetBlue’s offer price is a minimum of $33.50 per share. This includes a premium of about 38 percent to the final closing price of spirit shares. This is inclusive of the small monthly payments that will be made to the Spirit shareholders from January 2023 until the deal is completed. Right before the battle came to a close, Spirit shares were up by nearly 5 percent while the shares of JetBlue rose by 1 percent.
The two carriers involved in the takeover saga locked horns over creating a combined airline with the potential to challenge the legacy U.S carriers. The gravity of the fight escalated even more in the context of a labor crunch in the industry in addition to rocketing jet fuel costs. After all, a battle fought during adversity creates greater tremors and leaves larger debris.
In February, Frontier had offered a $2.9 billion deal, and Spirit was quite in agreement with the deal. All would have been well if not for JetBlue who decided to join the takeover bidding in April. Although JetBlue’s offer had much better terms, Spirit tried for a merger with Frontier stating antitrust concerns. Despite its preference for Frontier, the lack of investor support for the deal acted in favor of JetBlue.
Although many details or explanations aren’t available, the latest reports from Reuters suggest that Spirit called off the deal with Frontier in the latest shareholder meeting that was held on Thursday.
.@JetBlue moving forward with its plan to eliminate @SpiritAirlines as a competitor. Will pay $3.8 billion for the privilege and hopes to close the deal no later than the first half of 2024.
JetBlue still plans to divest Spirit’s holdings at Northeaat Alliance airports.
— Jason Rabinowitz (@AirlineFlyer) July 28, 2022
This is beyond infuriating. We just handed JetBlue a multi billion dollar bailout and now they are allowed to purchase another airline company. This is not partisan. Both sides have been bought and paid for. Disgusting. https://t.co/BcIEh82yAm
— Chris Curtis (@_ChrisCurtis) July 28, 2022
NEW YORK (AP) — JetBlue will buy Spirit Airlines for $3.8 billion creating nation's 5th largest airline.
— philip lewis (@Phil_Lewis_) July 28, 2022
We now turn to a live look at all the lawyers working on the Frontier-Spirit-JetBlue deal(s). pic.twitter.com/ze5wwwJdLb
— Ian Petchenik (@petchmo) July 27, 2022
Former Spirit pilots are going to be in these JetBlue cockpits like “what are all these buttons? We just had UP and DOWN.”
— Anthony DeVito (@AnthonyDeVito_) July 28, 2022
