JetBlue launches hostile takeover of Spirit after its earlier acquisition was rejected

[Eugene]

Source: The Verge

JetBlue launches hostile takeover of Spirit after its earlier acquisition was rejected

Spirit said the acquisition could raise antitrust issues

By Andrew J. Hawkins@andyjayhawk May 16, 2022, 11:34am EDT

JetBlue launched a hostile takeover of Spirit Airlines after its earlier acquisition offer was rejected. The New York-based airline said in a release that its tender offer for $30-per-share was “all-cash” and “fully financed.”

Earlier this month, Spirit’s board of directors rejected JetBlue’s $33-a-share bid to acquire the airline in favor of an existing merger agreement with Frontier, one of its ultra-low-cost competitors. The board cited antitrust issues and “an unacceptable level of closing risk” to its shareholders as its reasons for rejecting the JetBlue bid.

But JetBlue is still intent on acquiring Spirit, whether it wants to go ahead with the deal or not. The airline has said that absorbing Spirit would allow it to better compete with the “Big Four” carriers by increasing the size of its fleet and roster of trained pilots.

“JetBlue offers more value — a significant premium in cash — more certainty, and more benefits for all stakeholders,” JetBlue CEO Robin Hayes said in a statement. “Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges.”

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Read more: https://www.theverge.com/2022/5/16/23074907/jetblue-spirit-hostile-takeover-budget-airline-frontier

[TheRealNorth]

1. Because if you can't compete in the marketplace....

Buy out the competition. Then every stockholder wins.

[Dorn]

2. Buyouts result higher prices for you and me. Fullstop

https://www.ftc.gov/system/files/attachments/competition-counts/pdf-0116_competition-counts.pdf

Competition in America is about price, selection, and service. It benefits
consumers by keeping prices low and the quality and choice of goods
and services high. Competition also encourages businesses to offer new
and better products.

[Major Nikon]

3. It's interesting they included the roster of pilots as an asset they want to acquire

Commercial pilots are at a premium right now which included airline pilots and pretty much all others. I'm getting all the pilot work I can stand right now and I'm turning down jobs once or twice a week. I've also gotten some pretty lucrative offers for full time work from some of the outfits I do contract work for, but I have no interest in working full time. If the economy goes south, which it's bound to do eventually all of this is going to dry up. The airlines will then declare bankruptcy, lay off pilots, and rob the retirements of everyone working for them as usual.