Spirit Airlines rejects takeover bid from rival Frontier again
The budget airline anticipates completing the restructuring in the first quarter.
Spirit Airlines has again rejected a third takeover bid from budget rival Frontier, saying that it would focus on its own plan to emerge from bankruptcy and stabilise its finances.
The offer this week, like the last bid, offers Spirit shareholders 400 million dollars (£322 million) in debt and a 19% stake in Frontier Group Holdings, the parent company of Frontier.
Frontier said: “We remain convinced that the combination of Spirit and Frontier would have created more value than Spirit’s standalone plan.
“That said, we are disciplined acquirers and are focused on delivering for Frontier shareholders at a time when our airline is performing well in a dynamic market environment.”
The offer from Frontier late last month was also rejected almost immediately by Spirit.
Spirit said that it did offer a counter-proposal to Frontier this month, but that was rejected. The Florida airline is preparing for a hearing in court on its reorganisation plan, scheduled for Thursday.
Spirit anticipates completing the restructuring in the first quarter.
Frontier’s first attempt to merge with Spirit was in 2022, but it was outbid by JetBlue.
However, the Justice Department sued to block JetBlue’s 3.8 billion dollar (£3 billion) proposal, saying that it would drive up prices for Spirit customers who depend on low fares.
A federal judge agreed in with the Justice Department in January. JetBlue and Spirit dropped their merger bid two months later.
Spirit, the biggest US budget airline, filed for bankruptcy protection in November after working out terms with bondholders.
The airline has lost more than 2.5 billion dollars (£2 billion) since the start of 2020 and faces looming debt payments totalling more than one billion dollars (£800 million) in 2025 and 2026.
