JetBlue Makes Hostile Bid for Spirit Airlines
JetBlue (B6) has filed a "Vote No" proxy statement asking Spirit (NK) shareholders to vote AGAINST Spirit/Frontier merger.
JetBlue (B6) has filed a "Vote No" proxy statement asking Spirit (NK) shareholders to vote AGAINST Spirit/Frontier merger.
DALLAS - JetBlue (B6) has filed a "Vote No" proxy statement asking Spirit (NK) shareholders to vote AGAINST what it says is an inferior, high-risk, and low-value Spirit/Frontier (F9) merger at NK's impending special meeting.
Furthermore, B6 has launched an all-cash, fully financed tender offer to acquire all of Spirit's existing shares for US$30 per share, without interest and less any statutory withholding taxes. Given the NK Board of Directors' refusal to release the same due diligence information as Frontier, B6 is now offering to acquire Spirit for US$30 per share in cash via a fully financed tender offer.
The new offer provides a 60% premium to the transaction value as of May 13, 2022 — an appealing offer that is larger than the premium represented by B6's original bid. The airline says it is fully prepared to negotiate a fair and reasonable transaction at US$33, subject to receiving the required diligence.
JetBlue created JetBlueOffersMore.com and sent a letter to Spirit stockholders outlining the benefits of the merger, the certainty of closing, and, according to the B6 press release, NK's deceptive assertions.
JetBlue CEO Robin Hayes states in the letter, “JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders. Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges."
“Yet 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."
“Ask yourself a simple question: why won’t the Spirit Board engage with us constructively? The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.”
The letter goes on to say that B6's current offer still provides greater value and certainty to NK shareholders than F9's and that the airline is willing to engage on the basis of its initial proposal if the NK Board acts in good faith:
“Based on the clear superiority of our offer, we expected the Spirit Board to engage constructively. Given its unwillingness to share necessary information or negotiate in good faith, we adjusted our price accordingly, but will work towards a consensual transaction at $33 per share, subject to receiving the information to support it.”
Spirit Airlines, the Miramar, Florida-based ultra-low-cost carrier (ULCC), says it will hold a special virtual shareholder meeting on June 10, 2022.
What do you think of B6's hostile takeover bid for NK? Will NK bite this time around? Make sure to leave your comments on our SM channels.
Featured image: jetBlue N2048J Airbus A321-271NX. Photo: Andrew Henderson/Airways
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