Spirit Airlines rejects Frontier's ‘insufficient' bid — and expects to exit bankruptcy this quarter

Core Viewpoint - Spirit Airlines has rejected a bid from Frontier Group, stating it was not favorable for the low-cost carrier and anticipates exiting bankruptcy in the first quarter [1][6]. Group 1: Bid Details - Frontier's bid included an offer of $400 million in debt and a 19% stake in Frontier for Spirit shareholders, implying a total consideration of approximately $2.16 billion [1][2]. - Spirit's rejection was based on the belief that the proposal would not provide the anticipated shareholder value and raised concerns regarding the timing and successful completion of the deal [4]. Group 2: Industry Context - Ultra-low-cost carriers have faced challenges since the pandemic, as travelers increasingly prefer to pay for a more comfortable travel experience [2]. - Analysts suggest that a successful merger with Frontier could create a nationwide discount airline capable of attracting price-sensitive passengers [3]. Group 3: Company Background - Spirit Airlines declared bankruptcy in November due to ongoing financial losses, unsuccessful merger attempts, and high levels of debt [6]. - The airline had previously been close to a merger deal with Frontier in 2022, but negotiations were halted in favor of JetBlue, which ultimately won the bidding war [5].