Takeover target Spirit Airlines Inc SAVE.N on Tuesday 14 June said that it was in talks with JetBlue Airways Corp JBLU.O over a $3.4 billion sweetened offer and expects to decide on the proposal this month.
Details
The ultra-low-cost airline granted JetBlue access to the same due diligence information being shared with Frontier Group Holdings Inc ULCC.O after failing to secure enough shareholder support for its deal with the rival suitor.
Spirit CEO Ted Christie said the board plans to "bring this process to a conclusion" and update shareholders ahead of the 30 June shareholder meeting.
"We're pleased that there now seems to be a genuine desire from the Spirit board to engage with us," JetBlue chief executive Robin Hayes told Reuters on Friday 10 June, adding that he was "optimistic" that a deal could be reached. "We're going to continue to engage with the Spirit board over the next few weeks."
Either of the deals would create the fifth-largest US airline, helping the buyer compete with larger legacy players at a time when the industry faces labor and aircraft shortages but both will face intense regulatory scrutiny.
Spirit rebuffed a buyout proposal from JetBlue last month but later agreed to engage with it after the larger peer increased the reverse break-up fee by $150 million to $350 million, payable to Spirit shareholders, in case the deal falls through due to antitrust reasons.
Spirit, however, continues to be in talks with Frontier under the terms of its existing merger agreement.
Spirit also said that it was providing information requested by the US Justice Department and the Federal Trade Commission for both the deals as part of an ongoing antitrust review process.
Hayes told Reuters "the regulatory process is under way" and that the airline had provided documents to the Justice Department. "That process takes several months and... the conversations then would happen when you're well into that process," Hayes said.
Frontier shares were down 1.95% to $9.03, while Spirit shares were up nearly 1% at $21.41. The current value of Frontier's stock and cash offer is $19.49, trailing JetBlue's cash offer of $31.50 per share.
TIMELINE-Twists And Turns In Takeover Battle For Spirit Airlines
The above news followed by news that takeover target Spirit Airlines Inc <SAVE.N> said it was in talks with JetBlue Airways Corp <JBLU.O> over a $3.4 billion sweetened offer and was expecting to decide on the proposal by the end of June.
Spirit has granted JetBlue access to the due diligence information being shared with Frontier Group Holdings Inc <ULCC.O> after failing to secure enough shareholder support for its deal with the rival suitor.
Below are the key events of the takeover saga:
| Date | Development |
| Feb. 7 | Frontier makes a cash-and-stock offer of $25.83/share for Spirit Airlines |
| Feb. 8 | Lawyers from the U.S. Justice Department say Spirit and Frontier's merger to create the fifth-largest airline in the country would face close scrutiny |
| March 10 | Several public advocacy groups call on U.S. regulators to block Frontier's bid for Spirit |
| April 5 | JetBlue makes an unsolicited $3.6 billion, or $33/share, all-cash bid for Spirit |
| April 6 | JetBlue mounts a vigorous defense of its unsolicited $3.6 billion bid for Spirit, adding that it is "highly confident" of securing regulatory approval |
| April 7 | Spirit says that it would enter into discussions with JetBlue on its $3.6-billion offer as it could likely lead to a "superior proposal" to the one from Frontier |
| May 2 | Spirit rejects JetBlue's $33/share offer, saying it had a low likelihood of winning regulatory approval |
| May 10 | Head of Sun Country Airlines <SNCY.O> throws his backing behind potential merger in the ultra-low-cost airline sector |
| May 11 | Spirit says it will hold a shareholder meeting on June 10 for a vote on its proposed merger with Frontier |
| May 16 | JetBlue makes hostile all-cash takeover offer of $30/share and adds it was ready to "negotiate in good faith a consensual transaction at $33" |
| May 19 | Spirit Airlines urges shareholders to reject the hostile offer from JetBlue, saying it was "a cynical attempt to disrupt" its merger with Frontier |
| May 31 | Proxy advisory firm ISS urges Spirit shareholders to vote against a proposed merger with Frontier |
| June 2 | Frontier agrees to pay a break-up fee of $250 million in a bid to salvage its $2.9 billion acquisition of Spirit Airlines |
| June 3 | Shareholder advisory firm Glass Lewis recommends Spirit Airlines investors approve Frontier Group's $2.9 billion takeover bid, saying it was the "best available" at this time. |
| June 6 | JetBlue sweetens its takeover bid for Spirit by offering $31.50 per share in cash, comprising $30 per share at deal close and the prepayment of $1.50 per share of the reverse break-up fee. |
| June 8 | Spirit Airlines delays to June 30 a shareholder meeting to vote on its proposed merger with Frontier. |
| June 14 | Spirit Airlines said it was in talks with JetBlue Airways and has granted JetBlue access to the due diligence information being shared with Frontier Group. Spirit said it was expecting to decide on the proposal by the end of this month. |
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