Spirit Airlines Incorporated (NYSE:SAVE) on Tuesday announced it received a purchase proposal from JetBlue Airways Corporation (NASDAQ:JBLU) to buy the company’s outstanding shares for $33 apiece.
The unsolicited proposal from JetBlue amounts to a $3.6 billion price tag for the airline company. The announcement comes about two months after Frontier Group Holdings Inc (NASDAQ:ULCC), the parent company of Frontier Airlines, announced a $6.6 billion merger agreement with Spirit. At the time, Spirit and Frontier told investors that the planned merger will result in a stronger financial profile for the combined company, and allow them to compete even more aggressively in the airline space.
It’s unclear how the new purchase offer from JetBlue will impact the planned merger with Frontier Airlines. Although, CNBC's Jim Cramer quickly responded to the news, saying he doubts JetBlue's proposal will be approved by federal regulators.
i believe the feds will stop this "deal" in its tracks https://t.co/QdnDzIh8Pi
— Jim Cramer (@jimcramer) April 5, 2022
The battle between JetBlue and Frontier to capture Spirit comes amid an increasing number of mergers and acquisitions in the industry over the past 10 years. Currently, 70% of the U.S. airline market is controlled by four major airlines.
The announcement caused a spike in the price of Spirit airlines stock on Tuesday, and trading was halted before the close.
Price Actions: Shares of Spirit were up 22.37% and closed at $26.91, according to data from Benzinga Pro. Meanwhile, shares of JetBlue were down 7.08% to $13.64 and Frontier was up 3.92% to $11.92.
