JetBlue Offers $3.6 bln for Spirit in U.S. Low-cost Carrier Battle

WASHINGTON, April 5 (Reuters) – JetBlue Airways (JBLU.O) said Tuesday it made an unsolicited $3.6 billion bid for Spirit Airlines (SAVE.N), potentially snarling merger plans between the ultra-low-cost carrier and Frontier Group Holdings (ULCC.O).

JetBlue Chief Executive Officer Robin Hayes said the deal would make the New York-based airline a stronger competitor to the so-called four legacy U.S. airlines that control nearly 80% of the U.S. passenger market.

JetBlue, the sixth-largest U.S. passenger carrier, would operate Spirit under the JetBlue brand and he does not think any divestitures are needed.

The move comes as airlines face higher fuel and labor costs, and work to attract more leisure travelers, who have returned at a faster rate than business travelers since pandemic restrictions were relaxed.

JetBlue offered $33 a share all-cash, about 33% higher than Frontier’s offer of 1.9126 shares of stock and $2.13 in cash, which would value Spirit at $24.93 per share as of Tuesday’s closing price.

Shares of Spirit closed up 22% at $26.92, their highest level since mid-February. Sprit’s 52-week high is $39.19. Just before COVID-19 lockdowns became widespread, Spirit shares traded around $45.

Spirit declined to comment beyond a written statement that it would review the offer.