A new takeover offer for Spirit Airlines by JetBlue Airways of New York is now viewed as attractive enough for the South Florida-based carrier to enter into negotiations aimed at cutting a deal.
Late Thursday, Spirit, which already has a proposed $2.9 billion agreement on the table with Frontier Airlines, announced its board of directors believes JetBlue’s unsolicited $3.6 billion offer could lead to a “superior proposal” as defined in Spirit’s agreement with Frontier.
Spirit did not say when the JetBlue talks would begin.
In the interim, Spirit said it “remains bound by the terms of the merger agreement with Frontier,” and the Spirit board has not determined that JetBlue’s proposal is in fact a superior deal. Frontier and Spirit entered into their tentative agreement on February 7.
JetBlue quickly applauded the Spirit decision and said it looks forward “to engaging with the Spirit Board to finalize our combination.”
“We are pleased the Spirit board recognizes the compelling value for all stakeholders that JetBlue has offered,” said Robin Hayes, chief executive officer of JetBlue in a statement.
Wall Street analysts view the combination of Spirit and Frontier to be more compatible, as both are low-cost ultra discount airline. Hayes has acknowledged that JetBlue’s absorption of Spirit would pose logistical and work force “cultural” challenges arising from differences in the configurations of the airlines’ fleets and business models.
Spirit’s stock price was up slightly to $26.68 on Friday while JetBlue’s slid by 2.3% to $11.81. The shares of Frontier Holdings rose by a fraction to $10.74.
