JetBlue Airways has offered to buy Spirit Airlines for about $3.6 billion and break up a plan for Spirit to merge with rival budget carrier Frontier Airlines.
Spirit said Tuesday that its board will evaluate the JetBlue bid and decide what’s best for its shareholders.
JetBlue offered $33 per share in cash, which would be about 40% higher than Frontier would pay for Spirit under terms of a deal announced in February. Frontier’s offer in cash and stock was worth $2.9 billion when it was announced, but Frontier shares have fallen since then, reducing the value to Spirit shareholders.
Shares of Florida-based Spirit soared 22% after The New York Times first reported the JetBlue bid Tuesday.
A Frontier-Spirit tie-up would combine Frontier’s route map in the western United States with Spirit’s network along the East Coast and the Caribbean. Both are discount airlines that offer rock-bottom fares and make up some of the difference by charging extra for many things that bigger airlines include in the ticket price, including carry-on bags and soft drinks.
JetBlue is not the same kind of ultra-low-cost-carrier. Moreover, Frontier and Spirit are small enough that their deal might not get close scrutiny from antitrust regulators. Those same regulators already weighed in last year to block a much more limited partnership between JetBlue and American Airlines, arguing that such a deal would raise fares for passengers.
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