JetBlue makes a hostile takeover bid for Spirit Airlines

“It is unlikely that the DOJ or a court will be persuaded that JetBlue should be allowed to form an anticompetitive alliance that aligns its interests with a legacy airline and then also carry out an acquisition that would eliminate the largest airline ULCC,” he said. Spirit CEO Ted Christie. , he told investor analysts on a call this month, referring to his airline’s position as an ultra-low-cost carrier.

JetBlue disagreed with that conclusion, saying it would also preemptively ditch certain airports to address regulatory concerns. Frontier has not agreed to similar concessions, nor has it offered to pay a breakup fee if the merger fails over antitrust concerns. JetBlue would pay Spirit $200 million if the deal fell through for that reason.

“JetBlue offers more value, a significant cash premium, more certainty and more benefits for all stakeholders,” Jetblue CEO Robin Hayes said in a letter to Spirit shareholders on Monday. “Frontier offers less value, more risk, no divestment commitments, and no reverse breakout fee.”

The proposed merger between Spirit and Frontier has also raised concerns. In March, several progressive lawmakers, including Senators Elizabeth Warren, a Democrat from Massachusetts, and Bernie Sanders, an independent from Vermont, voiced doubts, warning that the merger could raise ticket prices and hurt customer service. Last month, the Justice Department sent the two airlines a “second request” for information about their merger, a process that effectively binds the deal until the companies answer the agency’s long list of questions.

JetBlue said Monday that Frontier and Spirit overlap on 104 nonstop routes, twice the number shared by JetBlue and Spirit.

A Spirit-Frontier merger would combine two budget airlines with strengths on opposite coasts. JetBlue’s offer could accelerate its plans to compete with the Big Four US carriers: American Airlines, Delta Air Lines, United Airlines and Southwest Airlines, which have a combined 66 percent share of the domestic market. A combination of Frontier and Spirit would control more than 8 percent of the market; JetBlue and Spirit together would control more than 10 percent.

JetBlue also accused Spirit’s management of being blinded to the benefits of its offer because of its relationship with Frontier’s leadership. Indigo Partners, a private equity firm that invests in low-cost airlines, had a majority stake in Spirit from 2006 to 2013, the same year it bought Frontier.

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