Spirit Airlines’ (NYSE:SAVE) board rejected JetBlue Airways Corporation’s (NASDAQ:JBLU) overtures for the third time on Thursday.
Spirit Airlines executives are emphatically rejecting JetBlue’s unsolicited offer to takeover the low-cost carrier after receiving two prior offers in April and May. The airline’s board urged shareholders to reject JetBlue’s (JBLU) and instead vote for the planned merger with Frontier Air Group (ULCC).
“JetBlue’s tender offer has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders,” Board Chairman Mac Gardner said. “Based on our own research and the advice of antitrust and economic experts, our view is that the proposed combination of JetBlue and Spirit lacks any realistic likelihood of obtaining regulatory approval, while our company faces a long and bleak limbo period as we await resolution.”
He added that clauses related to reverse breakup fees and potential business disruptions during a regulatory review make the deal a non-starter.
The release also elaborates on concerns related to the Northeast Alliance with American Airlines (AAL) that is currently under review by the Department of Justice. The lingering regulatory scrutiny is a linchpin to management’s rejection of the proposed deal, suggesting management would not consider accepting the deal at almost any price.
Elsewhere, the company specifically rejected accusations levied by JetBlue (JBLU) CEO Robin Hayes about a lack of consideration of the offer and undue influence from major shareholders. In fact, Spirit even more explicitly indicated its belief that the JetBlue (JBLU) offer is meant merely as a distraction rather than a serious bid.
“Spirit believes JetBlue’s proposals and offer are a cynical attempt to disrupt Spirit’s merger with Frontier, which JetBlue views as a competitive threat,” Spirit said on Thursday morning. “JetBlue…