Spirit Airlines' board still supports Frontier Airlines' $2.9 billion takeover bid for the airline, saying it determined JetBlue's competing $3.6 billion offer isn't a superior proposal.
Last month Spirit said that after speaking with financial and legal advisers, its directors believed JetBlue’s offer could “reasonably” turn out to be the better of the two deals. But on Monday the company announced that it was determined that JetBlue's offer “is not reasonably capable of being consummated."
In a letter sent to JetBlue, Spirit Chairman Mac Gardner said that JetBlue's bid had “an unacceptable level of closing risk" that shareholders would have to take on.
Spirit said its board continues to back the bid made by Frontier in February and views it as the best way to maximize value. The airline anticipates a deal with Frontier closing in the second half of the year.
Shares of Spirit Airlines Inc. fell 7.5% before the market open. Shares of Frontier Group Holdings Inc. declined slightly, while JetBlue Airways Corp.'s stock edged higher.