Spirit Airlines Incorporated on Tuesday announced it received a purchase proposal from JetBlue Airways Corporation to buy the company’s outstanding shares for $33 apiece.
The unsolicited proposal from JetBlue amounts to a $3.6 billion price tag for the airline company. The announcement comes about two months after Frontier Group Holdings Inc., the parent company of Frontier Airlines, announced a $6.6 billion merger agreement with Spirit. At the time, Spirit and Frontier told investors that the planned merger will result in a stronger financial profile for the combined company, and allow them to compete even more aggressively in the airline space.
It’s unclear how the new purchase offer from JetBlue will impact the planned merger with Frontier Airlines. Although, CNBC’s Jim Cramer quickly responded to the news, saying he doubts JetBlue’s proposal will be approved by federal regulators.
The battle between JetBlue and Frontier to capture Spirit comes amid an increasing number of mergers and acquisitions in the industry over the past 10 years. Currently, 70 percent of the U.S. airline market is controlled by four major airlines.
The announcement caused a spike in the price of Spirit airlines stock on Tuesday, and trading was halted before the close.
By Michael Cohen
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