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JetBlue is hostile to buying Spirit Airlines after rejection

CHICAGO / WASHINGTON, May 16 (Reuters) – JetBlue Airways Corp (JBLU.O) does not take no for an answer in its quest to buy rival Spirit Airlines (SAVE.N).

On Monday, the New York-based airline launched a hostile takeover bid for Spirit Airlines in cash, two weeks after the low-cost airline rejected an offer from the larger rival.

JetBlue, which offered $ 33 per share in early April, is locked in a takeover bid for Spirit with Frontier Group Holdings (ULCC.O) and has claimed that a deal will help better compete with the “big four” US airlines that control almost 80% of the passenger market.

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In a letter to Spirit shareholders on Monday, JetBlue offered $ 30 per share, saying it was ready to “negotiate in good faith a $ 33 deal, subject to due diligence.”

Spirit rejected the previous offer, saying it was unlikely to win approval from regulators. read more

JetBlue revealed on Monday that the acquisition of Spirit “has been a strategic goal for JetBlue for many years,” according to a letter dated April 29 sent by SpiritBlue.

JetBlue said on Monday that it had submitted a “Vote No” proxy statement urging Spirit shareholders to vote against the planned merger with Frontier, which rose 4% in early trading. The value of Frontiers cash and shares for each share in the discount company on Monday was recently $ 19.48 per share.

Shares of Spirit rose 8% to $ 18.32 in early trading. JetBlue shares fell 3.4% to 9.72%

JetBlue said “Spirits’ board prioritizes its own self-interest and personal relationship with Frontier over the interests of shareholders.”

It added “Ask yourself a simple question: why does not the Spirit Board want to engage constructively with us? The interests of Bill Franke’s Indigo Partners and the long-standing relationship between the two companies are the obvious answer.”

Frontier, Spirit and Franke did not immediately respond to Reuters’ comments.

Spirit will hold a shareholders’ meeting on June 10 to vote on the proposed merger with Frontier. read more

JetBlue said on Monday that on March 29, CEO Robin Hayes first called Spirit CEO Ted Christie to inform him of the airline’s interest in buying Spirit.

JetBlue, the sixth largest passenger company in the United States, will operate Spirit under the JetBlue brand and does not believe there is a need for a sale, but promised a $ 200 million reversal fee, or $ 1.80 per Spirit share, and plans to sell Spirit’s holdings in New York and Boston to address any overlap.

Spirit in April had applied for a significantly higher reverse breakup fee, JetBlue said.

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Reporting by Rajesh Kumar Singh in Chicago, Tanvi Mehta in Bengaluru and David Shepardson in Washington; Edited by Sriraj Kalluvila, David Evans and Lisa Shumaker

Our standards: Thomson Reuters Trust Principles.

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