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Woefully Insufficient: Spirit Says No to Frontier’s Merger Offer

Woefully Insufficient: Spirit Says No to Frontier's Merger Offer
Woefully Insufficient: Spirit Says No to Frontier's Merger Offer
Written by Harry Johnson

In today’s filing, Spirit dismissed Frontier’s offer, and expressed its intention to emerge from bankruptcy proceedings by Q1 2025.

Frontier Group Holdings, Inc., the parent organization of Frontier Airlines, Inc., has officially announced that it has presented an attractive merger offer to Spirit Airlines, Inc. The offer proposed the merger to be financed through the issuance of newly created Frontier debt and common stock.

According to Frontier, the proposed transaction was expected to deliver substantial value to Spirit’s financial stakeholders, surpassing the benefits of Spirit’s independent restructuring plan. By investing in the merged airline, Spirit’s financial stakeholders would have the opportunity to share in the potential growth of a more robust low-cost carrier, while also reaping the considerable synergies that Frontier anticipates from the integration of the airlines’ operations.

Bill Franke, the Chair of Frontier’s Board of Directors and the managing partner of Indigo Partners LLC, said, “This proposal reflects a compelling opportunity that will result in more value than Spirit’s standalone plan by creating a stronger low fare airline with the long-term viability to compete more effectively and enter new markets at scale. We stand ready to continue discussions with Spirit and its financial stakeholders and believe that we can promptly reach agreement on a transaction. We are hopeful we can achieve a resolution that delivers significant value for consumers, team members, communities, partners, creditors and shareholders.”

“While we are pleased with the strong results Frontier has been able to deliver through the execution of our business strategy, we have long believed a combination with Spirit would allow us to unlock additional value creation opportunities,” said Barry Biffle, CEO of Frontier. “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.”

But today, Spirit Airlines, which entered Chapter 11 bankruptcy protection in November, has declined a “compelling proposal” from Frontier, calling it “woefully insufficient financially.”

In today’s filing, Spirit dismissed Frontier’s offer, and expressed its intention to emerge from bankruptcy proceedings by Q1 2025.

Three years ago, Frontier and Spirit had already contemplated the merger; however, those negotiations fell through when Frontier’s rival JetBlue presented a Spirit with a more lucrative proposal. But the Spirit-JetBlue agreement was shut down in 2024 when a federal judge ultimately blocked JetBlue Airways’ planned $3.8-billion acquisition.

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