JetBlue Launches Tender Offer for Spirit Airlines at $30 a Share

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Spirit Airlines

shares surged Monday after

JetBlue Airways

launched a hostile takeover for the discount carrier.

JetBlue (ticker: JBLU) has begun a tender offer for Spirit (SAVE) shares. Spirit rejected JetBlue’s $3.6 billion takeover proposal earlier this month, opting to stick with a lower-priced bid from 

Frontier Group

(ULCC).

“Given the Spirit Board of Directors’ complete unwillingness to share the same necessary diligence information that was shared with Frontier, JetBlue is now offering to acquire Spirit for $30 per share in cash through a fully financed tender offer,” JetBlue said in a statement Monday.

“This represents a 60% premium to the value of the Frontier transaction as of May 13, 2022 — a very compelling offer and higher than the premium implied by JetBlue’s original proposal. JetBlue is fully prepared to negotiate in good faith a consensual transaction at $33, subject to receiving necessary diligence,” the airline added.

Spirit didn’t respond to a request for comment from Barron’s on Monday.

JetBlue’s initial offer price for Spirit was $33 a share.

JetBlue also on Monday urged Spirit shareholders in a letter to vote against what it called “the inferior, high risk, and low value Spirit/Frontier transaction” at Spirit’s special meeting next month.

JetBlue said in a filing with the Securities and Exchange Commission that it has received from

Goldman Sachs

an indication of its willingness to underwrite $3.5 billion in new debt to help finance the purchase of Spririt.

Spirit shares jumped 11.8% Monday to $18.99. JetBlue fell 4.4% to $9.62. Frontier shares rose 5.6%.

Write to Joe Woelfel at joseph.woelfel@barrons.com