Spirit Airlines has once again rejected an acquisition offer from Frontier Group, valued at approximately $2.16 billion. The ultra-low-cost carrier stated on Tuesday that the proposal was less favorable to its shareholders compared to its ongoing reorganization plan.
Frontier’s latest bid was a reiteration of its previous offer, which proposed giving Spirit shareholders $400 million in debt and a 19% stake in Frontier. This time, Frontier removed a requirement for Spirit to complete a $350 million equity rights offering and use the proceeds to retire its debtor-in-possession facility. Additionally, the revised proposal called for waiving a bankruptcy court-approved $35 million termination fee.
Despite these adjustments, Spirit, which filed for bankruptcy protection last year, cited unresolved material risks and issues as reasons for rejecting the offer. The airline, based in Florida, countered with a proposal that included $600 million in debt and $1.185 billion in equity—an offer that Frontier ultimately declined.
Spirit and Frontier have been engaged in merger discussions since at least 2022, even before Spirit filed for bankruptcy due to prolonged financial struggles and significant debt. However, the landscape shifted when JetBlue Airways entered the fray and successfully outbid Frontier. That deal was later blocked by a U.S. judge over antitrust concerns.
Frontier renewed its merger efforts earlier this year, but Spirit maintained that the latest proposal was inferior to previous discussions and lacked sufficient assurances regarding deal completion and commitment from Frontier. As a result, Spirit remains focused on completing its restructuring plan within the first quarter of the year.
