CEO of ‘optimistic’ airline JetBlue may acquire Spirit By Reuters


© Reuters. FILE PHOTO: JetBlue Airways planes are pictured at the gates of John F. Kennedy International Airport in New York June 15, 2013. REUTERS/Fred Prouser/File Photo

By Rajesh Kumar Singh and David Shepardson

CHICAGO/WASHINGTON (Reuters) – JetBlue Airways (NASDAQ:) Corp Chief Executive Robin Hayes said on Friday he was “optimistic” he could strike a deal to acquire Spirit Airlines (NYSE:) Inc.

“We are delighted that there now appears to be a genuine desire on the part of the Spirit board to engage with us,” Hayes told Reuters in an interview on Friday evening. “We will continue to engage with the Spirit board over the coming weeks.”

Florida-based ultra-low-cost carrier Spirit is the subject of a bidding war between JetBlue and Frontier Group Holdings Inc. Spirit has repeatedly rejected JetBlue’s bid, saying it has little chance of winning. get approval from US regulators.

Spirit postponed the shareholder vote on its merger with Frontier to June 30 from June 10. Hayes said he thinks the majority of Spirit shareholders think JetBlue’s offer is superior and “that’s why they had to delay the vote.”

JPMorgan (NYSE:) said in an analyst report “Thursday that a JetBlue deal to buy Spirit has become an ‘increasing likelihood.’

Both bidders see Spirit as an opportunity to expand their national footprint at a time when the US airline industry is grappling with persistent labor and aircraft shortages. Either deal would create America’s fifth-largest airline.

JetBlue has sweetened its offer for Spirit by increasing its reverse severance fee from $150 million to $350 million, bringing the overall value of its proposed deal to $3.4 billion. The New York-based airline has offered to pay part of the fees as soon as Spirit shareholders approve the deal.

Frontier agreed to pay Spirit a $250 million severance fee, but declined to raise its offer to $21.10 per share in cash and stock at Friday’s closing price in response to the revised offer. from JetBlue.

Hayes said the revised bids illustrate “the benefit of the competitive process that the board (Spirit) should have organized in the first place. The things that happened in the last two weeks could have happened months ago. “

JetBlue’s “Northeast Alliance” (NEA) partnership with American Airlines (NASDAQ:) is a sticking point with Spirit.

The Justice Department sued JetBlue and American for severing the partnership. Spirit asked JetBlue to drop the partnership if it wants a deal, but JetBlue refused.

JPMorgan said JetBlue would be willing to trade the NEA partnership for a Spirit merger.

“Mergers are transformational by design,” the note says.


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