Spirit Airlines Again Junks Acquisition Offer From Frontier Group
The company cited the bid from the ultra-low-cost carrier as less beneficial to shareholders than its ongoing reorganization
Spirit Airlines Again Junks Acquisition Offer From Frontier Group
The company cited the bid from the ultra-low-cost carrier as less beneficial to shareholders than its ongoing reorganization plan
Spirit Airlines has once again rejected the $2.16 billion acquisition offer from Frontier Group.
Earlier, Frontier proposed that Florida-based Spirit's shareholders would get $400 million in debt and a 19 percent stake in the company.
It dropped a requirement that Spirit complete a $350 million equity rights offering and use the proceeds to retire its debtor-in-possession facility. It also required the bankruptcy court-approved $35 million termination fee should be waived.
However, Spirit, which filed for bankruptcy protection in 2024, hopes to complete its restructuring in the first quarter. It said the revised proposal did not address certain material risks and the issues identified earlier.
The airline instead suggested a counterproposal in which Spirit shareholders would get $600 million in debt and $1.185 billion in equity.
This was rejected by Frontier.
Since 2022, the entities have been discussing the merger plans. This was before Spirit filed for bankruptcy due to financial losses and a substantial debt load for long.
In the interim, JetBlue Airways joined the fray. However, the deal was scrapped after a US court blocked it on anti-competition concerns.
Early this year, Frontier revived its takeover bid, but Spirit said the first offer was inferior. It sought an assurance that the deal would close and Frontier would not abandon it.