Spirit Airlines has rejected a third takeover attempt by rival Frontier Airlines, and will instead proceed with its own recapitalisation efforts, which it expects to complete by end-March.
Frontier parent Frontier Group submitted a revised proposal to Spirit on 4 February, in which the latter’s stakeholders will receive $400 million in second-lien debt issued by Frontier, as well as 19% of Frontier’s common equity post-merger.
The previous proposal, which Spirit rejected in late-January, would have required Spirit’s noteholders to invest $350 million in equity, and pay a $35 million backstop fee as part of the deal.
According to Spirit, the latest proposal from Frontier “would deliver less in value” compared to its standalone restructuring efforts and would result in “in extended and materially more costly and uncertain chapter 11 proceedings”.
Frontier has yet to respond to the latest developments. It was progressing with a deal to acquire Spirit but that fell through in 2022 when JetBlue Airways made a higher offer for the operator. The JetBlue deal was called off in 2024 after a federal judge ruled against it on competition grounds, and Spirit subsequently filed for Chapter 11 bankruptcy.
“Spirit will continue swiftly to advance and conclude its restructuring process, which will significantly deleverage the company and position it for long-term success,” the airline states.
A court hearing to consider the approval of Spirit’s reorganisation plan is scheduled to take place on 13 February.
