Spirit Airlines has again rejected a third takeover bid from budget rival Frontier, saying that it would focus on its own plan to emerge from bankruptcy and stabilize its finances.
Frontier makes another takeover bid for Spirit Airlines and it is rejected, again
Spirit Airlines has again rejected a third takeover bid from budget rival Frontier, saying that it would focus on its own plan to emerge from bankruptcy and stabilize its finances.
By MICHELLE CHAPMAN
February 12, 2025 at 2:09PM
The offer this week, like the last bid, offers Spirit shareholders $400 million in debt and a 19% stake in Frontier Group Holdings Inc., the parent company of Frontier.
''We remain convinced that the combination of Spirit and Frontier would have created more value than Spirit's standalone plan,'' Frontier said late Tuesday. ''That said, we are disciplined acquirors and are focused on delivering for Frontier shareholders at a time when our airline is performing well in a dynamic market environment.''
The offer from Frontier late last month was also rejected almost immediately by Spirit.
Spirit said that it did offer a counterproposal to Frontier this month, but that was rejected. The Florida airline has a hearing in court on its reorganization plan Thursday.
Spirit anticipates completing the restructuring in the first quarter.
Frontier's first attempt to merge with Spirit was in 2022, but it was outbid by JetBlue. However, the Justice Department sued to block JetBlue's $3.8 billion proposal, saying that it would drive up prices for Spirit customers who depend on low fares. A federal judge agreed in with the Justice Department in January. JetBlue and Spirit dropped their merger bid two months later.
Spirit, the biggest U.S. budget airline, filed for bankruptcy protection in November after working out terms with bondholders. The airline has lost more than $2.5 billion since the start of 2020 and faces looming debt payments totaling more than $1 billion in 2025 and 2026.
The biggest U.S. airlines have snagged some of Spirit's budget-conscious customers by offering their own brand of bare-bones tickets. And fares for U.S. leisure travel — Spirit's core business — sagged this past summer because of a glut of new flights.
Shares of Frontier Group fell 3% before the opening bell Wednesday.
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MICHELLE CHAPMAN
The Associated Press
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