Spirit Airlines has rejected a revised $2.16 billion acquisition offer from Frontier Group, opting to pursue its ongoing reorganization plan. Frontier had made concessions in its proposal, but Spirit believes its current plan benefits shareholders more.
Spirit Airlines rejected Frontier Group 's revised acquisition offer on Tuesday, valued at approximately $2.16 billion. The ultra-low-cost carrier stated that Frontier's proposal, despite some concessions, was less advantageous for shareholders compared to its ongoing reorganization plan. Frontier had resubmitted its initial bid from earlier this month, proposing that Spirit shareholders receive $400 million in debt and a 19% stake in Frontier.
Notably, Frontier removed the requirement for Spirit to complete a $350 million equity rights offering and utilize the funds to settle its debtor-in-possession facility. Additionally, they requested the waiver of the bankruptcy court-approved $35 million termination fee. Spirit Airlines, which filed for bankruptcy protection last year and anticipates completing its restructuring in the first quarter, asserted that the revised proposal failed to adequately address certain material risks and concerns previously identified. As a countermeasure, Spirit presented its own proposal where shareholders would receive $600 million in debt and $1.185 billion in equity. However, Frontier declined this counteroffer.The two airlines have been engaged in merger discussions since at least 2022, even before Spirit filed for bankruptcy due to persistent financial losses and a substantial debt burden. JetBlue Airways entered the picture and initially secured a deal, but a U.S. judge subsequently blocked it citing anti-competition concerns. Frontier subsequently revived its takeover efforts earlier this year, but Spirit had previously expressed reservations about the initial offer, deeming it inferior to the one discussed the previous year. They had also sought assurances that the deal would be finalized and Frontier would not withdraw.
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