Spirit Airlines’ board still supports Frontier Airlines’ $2.9 billion takeover bid for the airline, saying it determined JetBlue’s competing $3.6 billion offer isn’t a superior proposal.
Last month Spirit said that after speaking with financial and legal advisers, its directors believed JetBlue’s offer could “reasonably” turn out to be the better of the two deals.
But now Spirit says it has determined that JetBlue’s offer “is not reasonably capable of being consummated.”
A big stumbling block for JetBlue is whether it could win regulatory approval to buy Spirit.
Regulators are already suing to block a JetBlue partnership with American Airlines in the Northeast.
Frontier Airlines’ parent company announced in early February that it was aiming to buy Spirit Airlines in a $2.9 billion cash-and-stock deal that will allow the combined airline to be more competitive against its larger rivals. The deal is valued at $6.6 billion when accounting for the assumption of debt and operating lease liabilities.
By mid-March, several congressional Democrats started raising doubts about the proposed merger of Frontier and Spirit airlines. They said it would reduce competition among budget airlines and lead to higher airfares. They want the Biden administration to examine the deal closely and consider blocking it on antitrust grounds.