‘Spirit will continue swiftly to advance and conclude its restructuring process,’ the company said.
Spirit Airlines rejected Frontier Airlines’ latest takeover bid on Feb. 11, instead deciding to restructure after filing for Chapter 11 bankruptcy last year.
The Florida-based company said Frontier’s offer, worth $2.6 billion, was less beneficial to Spirit shareholders than its ongoing reorganization plan.
After Spirit rejected an offer in late January, Frontier submitted a new proposal on Feb. 4, promising Spirit shareholders $400 million in debt and a 19 percent stake in its parent company, Frontier Group Holdings.
The Denver-based Frontier’s offer lacked requirements for Spirit to complete a $350 million equity rights offering, while also waiving the $35 million termination fee that would be owed under a Backstop Commitment Agreement.
Spirit said that the proposal “did not address certain material risks and issues [it] previously identified” and submitted a counter offer on Feb. 7, asking for $600 million in debt and $1.185 billion in equity for Spirit shareholders.
Spirit’s offer would not require it to complete the equity rights offering but would necessitate Frontier paying the $35 million termination fee.
Related Story
On Feb. 10, Frontier rejected Spirit’s counterproposal and reiterated its new proposal bid, which Spirit shot down on Feb. 11.
“We remain convinced that the combination of Spirit and Frontier would have created more value than Spirit’s standalone plan,” Frontier said in a statement.
“That said, we are disciplined acquirers and are focused on delivering for Frontier shareholders at a time when our airline is performing well in a dynamic market environment.”
In a statement, Spirit said it was committed to its reorganization plan for long-term success.
“Spirit will continue swiftly to advance and conclude its restructuring process, which will significantly deleverage the company and position it for long-term success,” it said.
Spirit, which filed for bankruptcy protection last year, said it would likely complete its restructuring during the first quarter of 2025. The company has a hearing scheduled on Feb. 13 to consider confirmation of its reorganization plan.
“Approximately 99.99 percent of all voting creditors have voted to accept the plan, and all but two objections have already been resolved,” Spirit said.
Frontier has been trying to merge with Spirit since 2022 but failed after the New York-based JetBlue outbid it.
The following year, the Department of Justice sued to block the merger with JetBlue, and a federal judge rejected the plan in 2024 on antitrust grounds.
The ruling led to both JetBlue and Spirit dropping their merger two months later.
After becoming the nation’s largest budget airline, Spirit filed for bankruptcy protection in November 2024.
The company has lost more than $2.5 billion since the beginning of 2020, with massive debt payments totaling more than $1 billion looming in 2025 and 2026.
Spirit told investors when it last filed disclosures with the SEC that it had roughly $2.54 billion in overall liabilities, including $1.25 billion in long-term debt and leases.
That total is nearly twice Spirit’s overall assets, valued at roughly $1.21 billion.
In late 2024, a Spirit spokeswoman told The Epoch Times that the airline will continue operating as usual during its reorganization process.
Austin Alonzo, Reuters, and The Associated Press contributed to this report.
