JetBlue CEO is ‘confident’ the airline will be able to buy Spirit
- The CEO of JetBlue says he is “optimistic” he can reach an agreement to acquire Spirit Airlines.
- Florida-based ultra-low-cost carrier Spirit is the subject of a bidding war between JetBlue and Frontier.
- Spirit repeatedly rejected JetBlue’s offer.
JetBlue Airways Corp (JBLU.O) chief executive Robin Hayes said on Friday he “hopes” he can reach an agreement to acquire Spirit Airlines Inc (SAVE.N).
“We are confident that there is currently, by all accounts, a genuine desire on the part of the board of Spirit to join us,” Hayes told Reuters at a meeting on Friday evening. “We will continue to draw with the Spirit board over the next two weeks.”
Florida-based super-low-cost carrier Spirit is the subject of a bidding battle between JetBlue and Frontier Group Holdings Inc (ULCC.O). Soul repeatedly rejected JetBlue’s deal, saying it had a slim chance of getting approval from US controllers.
Soul postponed the investor vote on its consolidation with Frontier to June 30 from June 10. Read more Hayes said he thinks most Spirit investors accept that JetBlue’s proposal is unmatched and “that’s why they need to postpone the vote”.
JPMorgan said in an expert report on Thursday that an arrangement by JetBlue to buy Spirit has turned into a “developing probability.”
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Both bidders view Spirit as a chance to expand their local impressions when the US carrier industry is beset by stubborn work and aircraft deficiencies. The two arrangements would make America’s fifth-largest aircraft.
JetBlue improved its proposal by increasing its opposing separation fee from $150 million to $350 million, bringing the overall value of its proposed arrangement to $3.4 billion. The New York-based carrier offered to pay a portion of the fee immediately after Spirit’s investors approved the arrangement. understand more
Wilderness agreed to pay a $250 million severance charge, but declined to increase its offer of $21.10 in real money and stock to Friday’s end price in light of JetBlue’s reconsidered offer .
Hayes said the amended deals describe “the edge of the hard cycle the board (Spirit) should have run anyway. The things that happened in the last fourteen days could have happened months ago.
JetBlue’s Upper East Alliance (NEA) organization with American Airlines (AAL.O) is an anchor with Spirit.
The Department of Justice sued JetBlue and America to loosen up the organization. Soul asked if she needed an arrangement, but JetBlue refused.
JPMorgan said JetBlue may want to trade the NEA organization for a consolidation.
“Consolidations are groundbreaking by plan,” the note says.