JetBlue Airways (B6, New York JFK) has warned it may be compelled to end its bid to acquire Spirit Airlines (NK, Fort Lauderdale International) because of a federal judge’s decision to block the proposed USD3.8 billion deal citing competition concerns. This is despite the fact that a week ago the two carriers pledged to appeal the ruling to keep their tie-up alive.
JetBlue revealed in a filing to the U.S. Securities and Exchange Commission on Friday, January 26, that it had informed Spirit that “certain conditions to closing” required by the merger agreement they signed on July 28, 2022, may not be met before “the outside dates” set out in the contract.
It added that it had “also informed Spirit that accordingly the merger agreement may be terminable on and after January 28, 2024,” and that “JetBlue continues to evaluate its options” under the planned deal.
Spirit responded hours later that it “believes there is no basis for terminating the merger agreement. Spirit will continue to abide by all of its obligations” under the agreement, “and it expects JetBlue to do the same.”
The announcement of a proposed merger agreed between the boards of JetBlue Airways and Spirit Airlines in July 2022 came within a day of Spirit terminating a similar contract with Frontier Airlines (F9, Denver International). That left the way open for competitor JetBlue, which had been involved in a protracted bidding war with Frontier.
