A monthslong effort by Frontier Airlines to acquire Spirit Airlines abruptly ended on Wednesday when the companies called off their proposal, giving life to a rival bid for Spirit by JetBlue Airways.
The announcement came shortly before Spirit was to announce the results of a shareholder vote on Frontier’s acquisition offer. Spirit had repeatedly delayed the vote as it sought to persuade shareholders to support the deal and ignore the allure of the more valuable JetBlue offer.
Frontier had said last month that it would offer a $250 million reverse breakup fee if its proposed deal with Spirit wasn’t approved by regulators.
“While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our team members on the transaction over the past many months,” Ted Christie, Spirit’s chief executive, said in a statement. “Moving forward, the Spirit board of directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders.”
Frontier and JetBlue were battling over Spirit to better compete with legacy carriers, or the “big four” airlines that control nearly 80% of the US passenger market. The Justice Department and six states in September sued to unwind JetBlue and American Airlines’s “Northeast Alliance” partnership, alleging the agreement would lead to higher fares in busy northeastern U.S. airports.
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