By Rajesh Kumar Singh and David Shepardson
CHICAGO/WASHINGTON (Reuters) -JetBlue Airways Corp is not taking no for an answer in its quest to buy rival Spirit Airlines.
On Monday, the New York-based carrier launched a hostile all-cash takeover bid for Spirit Airlines, two weeks after the ultra-low-cost carrier rejected an offer from the larger rival.
JetBlue, which in early April offered $33 per share, is locked in a takeover battle for Spirit with Frontier Group Holdings and has argued a deal will help better compete with the “Big Four” U.S. airlines that control nearly 80% of the passenger market.
In a letter to Spirit shareholders on Monday, JetBlue offered $30 per share and said it was ready to “negotiate in good faith a consensual transaction at $33, subject to receiving necessary diligence.”
Spirit said its board will “carefully” review JetBlue’s offer. The company plans to inform shareholders of the board’s decision within 10 business days.
It urged shareholders to take no action on the JetBlue offer at this time.
The Florida-based airline rejected the earlier offer, saying it had a low likelihood of winning approval from regulators.
JetBlue, however, called that argument a “red herring”. It said Spirit’s deal with Frontier faces similar regulatory risk.
“Spirit’s Board is prioritizing its own self-interest and personal relationships with Frontier over its shareholders’ interests,” JetBlue Chief Executive Robin Hayes said in his open letter to Spirit shareholders.
Hayes accused the Spirit Board of not acting in the best interests of its shareholders, citing “significant” ties of its multiple directors to Frontier’s chairman and veteran budget airline investor Bill Franke.
Franke, who masterminded the Frontier-Spirit deal, previously served as chairman of Spirit.
“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…