Spirit Airlines (NYSE:SAVE) is climbing 8% in early trading. SAVE stock is rallying after JetBlue (NASDAQ:JBLU) raised its takeover offer for Spirit to $3.65 billion or $33.50 per share versus its last proposal of $31.50 per share. The new offer is 68% above a previous bid by Frontier Airlines that Spirit had said that it would accept.
Also importantly, JetBlue claimed that in the new proposal, it “significantly increases” the number of assets that it’s willing to sell in order to convince regulators to allow it to buy Spirit. Previously, Spirit said it did not believe that regulators would agree to back JetBlue’s acquisition of Spirit. The latter airlines, however, said today that it would consider JetBlue’s new proposal.
JetBlue’s New (and Final?) Offer for SAVE Stock
Meanwhile, JetBlue’s CEO, Robin Hayes, stated that if Spirit does not accept JetBlue’s latest offer, he would keep trying to convince the owners of SAVE stock to reject Frontier’s bid.
Spirit’s shareholders are slated to vote on that offer on June 30. The company has stated that it would finish its ongoing negotiations with both Frontier and JetBlue before that day.
JetBlue has not agreed to give up its partnership in the northeastern U.S. with American Airlines (NASDAQ:AAL). Numerous analysts reportedly think that regulators, as a result, would not acquiesce in a takeover of Spirit by JetBlue. The latter airlines has said that it would pay Spirit $350 million if Spirit accepts it proposal and the merger subsequently falls through.
Spirit reported that:
Spirit continues to be bound by the terms of its merger agreement with Frontier, under which a ‘Superior Proposal’ is defined as being both reasonably capable of being consummated and more favorable to Spirit’s stockholders from a financial point of view.
On the date of publication, Larry Ramer 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.
