Spirit Airlines rejected a $3.6bn takeover bid by rival JetBlue Airways, said The Washington Post. With it, the board of Spirit Airlines went on to pursue a merger with Frontier Airlines. Spirit Airlines argues that the bid of JetBlue is less attractive. Plus there is no sign of a better deal there.
The rejection includes a concern that Spirit Airlines board finds JetBlue proposal is risky. It involves an unacceptable level of closing risk that would happen in Spirit Airlines stockholders. The Spirit board chairman, Mac Gardner said that the firm believed the pending merger with Frontier instead would create a better chapter for Spirit.
The three airlines are finding a way to create a career that would bring betterment as the nation’s four biggest airlines. They dominate domestic air travel. Spirit Airlines, instead of citing the buyout bid with JetBlue, it announced $6.6bn merger plans with Frontier. Gardner added that after reviewing the updated proposal from JetBlue, the firm said that Frontier merger would be the best future for Spirit.
However, he also noted that rejection prospects by the Fed centered on an alliance between JetBlue and American Airline. Thus, it is too risky. The risky exposure would be so high that there would be no responsible board would accept. So, in this concern, JetBlue’s economic offer is illusory, said him.
JetBlue executive Robin Hayes said that the firm would offer meaningful benefits for customers. Among others the offerings include the superior value for shareholders of both airlines, and new opportunities for crew members. Analysts said that the merger between two would be more effective to enlarge both firms. Spirit-Frontier combination would put JetBlue in fifth place, that is why it is a positive prospect for JetBlue.
