Spirit Airlines rejects Frontier’s new merger bid; Frontier ready to keep talking

Low-cost carrier Spirit Airlines has rejected a second bid to merge with Frontier Airlines, saying the Denver-based airline’s offer was too low.

Frontier said in a statement Wednesday that the merger “would provide meaningful value to Spirit financial stakeholders” in excess of Spirit’s restructuring plan. And combining with Spirit would create opportunities for Frontier, Barry Biffle, Frontier CEO, said.

Frontier ended a 2022 bid to merge with Spirit after deciding it didn’t have the votes in the face of a larger offer by JetBlue Airways.

Spirit, which filed for reorganization bankruptcy last year, said in a filing submitted Wednesday to the Securities and Exchange Commission that after a review, the airline and other parties determined the offer would provide less value to stockholders than the company’s existing plan to emerge from bankruptcy.

“We stand ready to continue discussions with Spirit and its financial stakeholders and believe that we can promptly reach agreement on a transaction,” said Bill Franke, chairman of Frontier’s board of directors. “We are hopeful we can achieve a resolution that delivers significant value for consumers, team members, communities, partners, creditors and shareholders.”

Frontier’s proposal, offered Jan. 7, would issue $400 million in debt to be held by Spirit stakeholders and 19% of Frontier’s stock. Spirit would have sold $350 million of its stock to cover its debt.

Spirit said in its SEC filing that the timing and completion of the proposal were uncertain and that it would need regulatory and court approvals. The airline and investors weren’t willing to invest $350 million “based on the terms of the Proposal.”