Spirit, the biggest U.S. budget airline, filed for bankruptcy protection in November after working out terms with bondholders.
Spirit Airlines has once again turned down a third acquisition proposal from its budget competitor Frontier, asserting its commitment to executing its own strategy to exit bankruptcy and enhance its financial stability.
Similar to the previous offer, the latest bid includes $400 million in debt for Spirit shareholders and a 19% ownership stake in Frontier Group Holdings Inc., the parent company of Frontier.
Frontier expressed its belief that combining Spirit and Frontier would have generated more value compared to Spirit’s independent restructuring plan. Nonetheless, Frontier emphasized its disciplined approach to acquisitions and its determination to deliver results for Frontier shareholders during a period of strong performance in the airline industry.
The offer from Frontier late last month was also rejected almost immediately by Spirit.
Spirit said that it did offer a counterproposal to Frontier this month, but that was rejected. The Florida airline has a hearing in court on its reorganization plan Thursday.
Spirit anticipates completing the restructuring in the first quarter.
Frontier’s first attempt to merge with Spirit was in 2022, but it was outbid by JetBlue. However, the Justice Department sued to block JetBlue’s $3.8 billion proposal, saying that it would drive up prices for Spirit customers who depend on low fares. A federal judge agreed in with the Justice Department in January. JetBlue and Spirit dropped their merger bid two months later.
Spirit, the biggest U.S. budget airline, filed for bankruptcy protection in November after working out terms with bondholders. The airline has lost more than $2.5 billion since the start of 2020 and faces looming debt payments totaling more than $1 billion in 2025 and 2026.
Shares of Frontier Group fell 3% before the opening bell Wednesday.
