JetBlue launches hostile takeover of Spirit Airlines
NEW YORK, May 16: American low-cost carrier JetBlue Airlines announced on Monday a hostile takeover bid for its rival Spirit Airlines, which had rejected a previous bid in favour of a merger with Frontier.
Earlier this month, Spirit reiterated its support for a merger with Frontier Airlines, saying it concluded the $3.6 billion JetBlue offer involved excessive regulatory risk.
It said the Department of Justice's challenge of JetBlue's alliance with American Airlines raised the odds that a takeover of Spirit by JetBlue might get blocked.
"JetBlue has filed a 'Vote No' proxy statement and commenced an all-cash tender offer," JetBlue said in a statement, asking Spirit shareholders to reject the proposed merger with Frontier at a meeting on 10 June.
The company offered a cash buyout of Spirit shares at a unit price of $30 -- adding that it was prepared to return to its original offer of $33 per share if Spirit agreed to return to the negotiating table.
"The Spirit Board of Directors has failed to act in the best interests of their shareholders by refusing to engage constructively on our clearly superior proposal to acquire Spirit," JetBlue said in a Monday statement. -AFP