Spirit Frontier Merger: 13 Things for SAVE Investors to Know as Shares Fly

Spirit Airlines (NYSE:SAVE) stock is on the move after announcing plans for a merger with Frontier Airlines’ parent company Frontier Group (NASDAQ:ULCC).

A yellow, Spirit Airlines (SAVE) branded airplane flying in the air representing the Frontier merger.

Source: Markus Mainka / Shutterstock.com

Let’s dive into the Spirit Airlines and Frontier Airlines merger news below!

  • Frontier Group will use a mix of cash and stock to acquire all shares of SAVE.
  • That includes 1.9126 shares of ULCC stock and $2.13 in cash for each share of SAVE stock.
  • This implies a value of $25.83 per share of SAVE stock based on closing prices from Friday.
  • It also represents a 19% premium from SAVE’s closing price on Friday.
  • That’s also a 26% premium based on the 30 trading-day volume-weighted average prices of Frontier and Spirit.
  • Frontier Group notes that this offer has it valuing Spirit Airlines at $2.9 billion.
  • It also places a transaction value of $6.6 billion on the deal when including net debt and operating lease liabilities.
  • When the Spirit Airlines and Frontier Group merger comes to a close, ULCC investors will hold a 51.5% stake in the combined company.
  • This will leave SAVE stock investors with a 48.5% stake in the business.
  • Spirit Airlines and Frontier Group note that both companies’ Boards of Directors have given their unanimous support to the merger.
  • When the merger closes, the new Board will be made up of seven members chosen by Frontier and five chosen by Spirit Airlines.
  • Spirit Airlines and Frontier are expecting the merger to close during the second half of 2022.
  • However, it will first have to complete customary closing conditions, such as getting approval from shareholders and regulators.

SAVE stock is up 14.9% and ULCC stock is up 1.8% as of Monday morning.

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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/02/spirit-frontier-merger-13-things-for-save-investors-to-know-as-shares-fly/.

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