Spirit Airlines Rejects Frontier’s Latest Acquisition Offer

February 12, 2025 TruthUSA

“Spirit will continue to move quickly to finalize its restructuring process,” the company stated.

On February 11, Spirit Airlines turned down the latest acquisition offer from Frontier Airlines and opted for restructuring after filing for Chapter 11 bankruptcy last year.

The Florida-based company announced that Frontier’s bid, valued at $2.6 billion, was less advantageous for Spirit shareholders compared to its current reorganization strategy.

After rejecting an earlier proposal in late January, Frontier provided a revised offer on February 4, which included $400 million in debt and a 19 percent ownership share in Frontier Group Holdings for Spirit shareholders.

The bid from the Denver-based Frontier did not include stipulations for Spirit to complete a $350 million equity rights offering, also forgoing the $35 million termination fee that would be incurred under a Backstop Commitment Agreement.

Spirit claimed that the offer “failed to address specific significant risks and issues [it] had previously identified” and on February 7, presented a counteroffer requesting $600 million in debt and $1.185 billion in equity for its shareholders.

This counteroffer would eliminate the need for the equity rights offering but would require Frontier to pay the $35 million termination fee.

On February 10, Frontier dismissed Spirit’s counterproposal and reinforced its revised offer, which Spirit subsequently rejected on February 11.

“We firmly believe that merging Spirit with Frontier would have generated greater value than Spirit’s independent plan,” said Frontier in a statement.

“However, we remain disciplined as acquirers and are focused on providing returns for Frontier shareholders in a fluctuating market.”

In its statement, Spirit affirmed its commitment to its reorganization plan aimed at achieving long-term success.

“Spirit will continue to accelerate and finalize its restructuring process, significantly reducing the company’s debt and positioning it for long-term success,” it stated.

Having filed for bankruptcy protection last year, Spirit anticipates completing its restructuring by the first quarter of 2025. A hearing is scheduled for February 13 to review the confirmation of its reorganization plan.

“Nearly 99.99 percent of all voting creditors have endorsed the plan, and all but two objections have been resolved,” noted Spirit.

Frontier has sought to merge with Spirit since 2022 but was unsuccessful following a higher bid from JetBlue based in New York.

The subsequent year, the Department of Justice intervened to block the merger with JetBlue, and a federal judge overturned the plan in 2024 due to antitrust concerns.

This ruling caused both JetBlue and Spirit to abandon their merger just two months later.

After emerging as the largest budget airline in the nation, Spirit filed for bankruptcy protection in November 2024.

The company has incurred losses exceeding $2.5 billion since early 2020, with substantial debt obligations of over $1 billion due in 2025 and 2026.

Spirit informed investors during its recent SEC filings that it has around $2.54 billion in total liabilities, which includes $1.25 billion in long-term debt and leases.

This figure is almost double Spirit’s total assets, which are estimated at around $1.21 billion.

In late 2024, a representative from Spirit informed The Epoch Times that the airline will maintain regular operations throughout its reorganization process.

Austin Alonzo, along with contributions from Reuters and The Associated Press, contributed to this report.

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