JetBlue Has Launched a Hostile Takeover of Spirit Airlines

JetBlue Airways has launched a hostile takeover bid of Spirit Airlines.

The former airline originally had offered $33 a share but Spirit’s board declined the offer in favor of an earlier plan to merge with Frontier Airlines.

On Monday Jet Blue had offered Spirit shareholders $30 a share as part of a tender offer and in a proxy statement urged them to vote against the Frontier deal during a June 10 Spirit shareholder meeting.

The company also said its earlier offer of $33 per share is still on the table if Spirit decides to negotiate. Spirit’s shares closed Friday at $16.98.

JetBlue called that rationale a “smokescreen to distract from the fact that its merger with Frontier faces similar regulatory risk.”

CEO Robin Hayes said in a staff note that the airline is offering to buy shares from Spirit shareholders “at a price slightly lower than our original offer because the Spirit Board didn’t follow a fair process or allow us to look ‘under the hood’ like they allowed Frontier to do.”

Spirit’s CEO Ted Christie said the airline’s board put a “tremendous amount of effort” into reviewing the JetBlue offer.

In an interview with CNBC’s “Power Lunch,” he said JetBlue was “putting misinformation into the market.” Spirit is reviewing JetBlue’s tender offer.

According to Jet Blue, acquiring Spirit would give it access to a large fleet of Airbus planes, trained pilots and the ability to better compete against the “Big Four” U.S. airlines that control most of the U.S. market.

Spirit and Frontier say a combination of those two discount carriers would allow them to grow and compete more easily.

Either combination for Spirit would create the country’s fifth-largest carrier.

“Despite SAVE and Frontier having slight differences, the operating models between the two are similar enough to drive efficiencies,” Jefferies aviation analyst Sheila Kahyaoglu said in a note. “JBLU is a more direct competitor to the legacy network carriers, particularly in the premium markets where network carriers have shifted focus.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.