The Frontier-Spirit merger dance appears to have hit another snag.
Associated Press and the Financial Post reported early on 29JAN that Frontier attempted another merger bid with Spirit, which declared bankruptcy late last year as budget airlines struggle to make ends meet.
Frontier Group Holdings Inc., the parent company of Frontier Airlines, said the proposed deal would include common stock and newly issued Frontier debt, AP’s story stated.
However, more recently, Reuters reports Spirit rejected Frontier’s 29JAN bid as “it was not favourable for the low-cost carrier.” Reuters also said Spirit “expects to exit bankruptcy in the first quarter.”
Frontier offered Spirit shareholders USD $400 million in debt and a 19% stake in Frontier earlier this month, Spirit said in a regulatory filing, the Reuters story stated. The proposal implied a total consideration of about $2.16 billion, Frontier said in a letter to Spirit that was made public along with the filing.
According to CNN, Frontier said in a 29JAN statement that a combined company “would provide meaningful value to Spirit financial stakeholders.”
”As a combined airline, we would be positioned to offer more options and deeper savings, as well as an enhanced travel experience with more reliable service," Frontier CEO Barry Biffle said in a statement.
But, like Reuters, CNN also said Spirit has rejected the latest offer as being “far short” of what’s needed.
Where that leads Frontier’s takeover is unclear. But it seems they’ll have to seriously up their offer to convince Spirit to accept a merger.
