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JetBlue Airways Corp. plans to launch a hostile takeover attempt for discount carrier Spirit Airlines Inc., according to people familiar with the matter, after Spirit rejected JetBlue’s $3.6 billion offer in favor of an existing deal with Frontier Airlines.
JetBlue plans to appeal directly to Spirit’s shareholders by launching a tender offer for their shares, in hopes of pressuring Spirit’s management to re-engage in negotiations, the people said. At the same time, JetBlue plans to urge Spirit shareholders to vote against Spirit’s planned merger with Frontier Group Holdings Inc. on June 10 in a further effort to sway the company’s leaders, the people said.
JetBlue is offering $30 a share in cash in its tender offer, but would be open to paying its initial offer price of $33 a share if Spirit comes to the negotiating table and provides data JetBlue has requested, the people said.
JETBLUE OFFERS TO BUY SPIRIT AIRLINES FOR ABOUT $3.6 BILLION CASH
The tender offer is slated to commence Monday, May 16, and remain open until June 30, though JetBlue could extend that period, one of the people said. JetBlue has started meeting with some of Spirit’s shareholders, another person familiar with the matter said.
Spirit has been the subject of a tug of war between two rival carriers that both consider the Florida-based airline as key to their ability to grow and challenge the big airlines that dominate the industry in the U.S. Either transaction, if approved, would create the fifth-largest U.S. airline.