As the Spirit Airlines takeover saga continues, Frontier Airlines CEO, Barry Biffle, has confirmed that the airline will not be increasing its offer any further. In a letter to Spirit, Biffle advised that the airline’s most recent proposal will be its “last, best and final offer.”

Biffle also indicated that should Spirit accept the offer on the table from rival JetBlue, Frontier would waive its right to match the bid. The letter stated,

"In line with our recent discussions, Frontier does not intend to propose any further modifications to the financial terms of the Merger Agreement”.

Spirit recently delayed a shareholder vote on Frontier’s final offer, while it reviewed the latest offer from JetBlue. This vote is now due to take place on July 15th. However, Frontier recognizes that it does not currently have the required shareholder support at Spirit to pass the deal, and Biffle has requested that the vote be postponed until July 27th.

This would allow Frontier more time to gain more support for its deal, with Biffle stating, "we still remain very far from obtaining approval from Spirit stockholders based on the proxy data we received as of July 8th.”

In the letter to Spirit, Frontier CEO, Barry Biffle, went on to say,

“As has been the case throughout this process, we remain committed to this transaction. However, should the Spirit Board of Directors conclude that it would instead desire to pursue an alternative transaction with JetBlue, we would appreciate being advised of that determination.”

Frontier Airlines vs JetBlue

Let’s take a closer look at the takeover bids currently on the table from both airlines.

Frontier Airlines is offering a cash-and-stock deal for its ultra-low-cost rival. As part of its latest and final revision of the offer, the carrier is proposing to increase the cash element of the deal by $2 per share to $4.13 per share. The stock element of the deal involves 1.9 Frontier shares being offered for every Spirit share. The total value of the offer, at the current share price, is approximately $2.4 billion.

In response, JetBlue raised the value of its cash offer to $3.7 billion. Spirit Airlines has repeatedly said, however, that a takeover from JetBlue is unlikely to win approval from the Department of Justice. Frontier Airlines is well aware of this, with Biffle mentioning, “the path to regulatory approval of a JetBlue-Spirit combination seems more impossible by the day.”

Background to the merger bids

The process started in February 2022, when Frontier made a merger bid for Spirit. JetBlue then entered the frame in April with its own bid for the airline.

Both JetBlue and Frontier see the takeover as a unique opportunity to expand their domestic footprint at a time when the industry is suffering from crippling staffing shortages and ongoing disruption.

Either deal would lead to the creation of the fifth-largest airline in the US, behind American Airlines, Delta Air Lines, United Airlines, and Southwest.

As the takeover saga continues, industry eyes will now be focused on the proposed Spirit shareholder vote this Friday, if it is not postponed, as has been requested by Frontier.

What do you think of this latest development in the ongoing Spirit Airlines takeover bid? Share your thoughts by commenting below.

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