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Jetblue ( the sixth-largest U.S. passenger carrier) in competition with the country’s airline’s “big four” rivals, which comprise almost 90% of the market, the airline is attempting to bid out one of its main rivals Spirit airlines. This comes after two weeks ago when the low-cost carrier denied its offer from its competitor. On Monday $30 per share was offered, in an additional statement during a shareholder meeting, the company pushed against a vote on the frontier deal during a shareholder meeting.
Spirit is currently considering the offer and is in the process of reviewing the offer in a careful manner. An earlier offer was rejected by the Florida company, stating the probability of approval from regulatory bodies. In an argument against this claim, Jetblue said that this marks a “red herring” saying that the deal with Frontier carries an alike risk.
In a letter, JetBlue’s Chief Executive Robin Hayes said “Spirit’s Board is prioritizing its own self-interest and personal relationships with Frontier over its shareholders’ interests.” He added that spirit’s board was not acting in the interests of its shareholders, adding that the relationship of the directors to Frontier’s chairman and veteran budget airline investor Bill Franke who served as a former chairman for Spirit.
In addition, Hayes asked people to consider this: “why won’t the Spirit Board engage with us constructively?” He then answered the question, “The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.”
The company pressed shareholders of the company to vote against the merger with Frontier. These concerns correlate with a lawsuit by the U.S. Department of Justice over the partnership with American Airlines Group Inc (AAL.O) based in Newyork and the Boston area. This has been the main concern by the company Spirit when it comes to the avoidance of said offer.
Written by Skye Leon
Sources:
Reuters: JetBlue goes hostile to buy Spirit Airlines after rejection; by Rajesh Kumar Singth and David Shepardson
CNBC: JetBlue launches hostile takeover bid for Spirit Airlines; by Leslie Josephs
Inset Image Courtesy of Pat Guiney’s Flickr Page – Creative Commons License
Featured and Top Image Courtesy of Andrew E. Cohen’s Flickr Page – Creative Commons License
