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Investing.com-- Spirit Airlines Inc (OTC:SAVEQ) has declined a renewed acquisition proposal from Frontier Group Holdings Inc (NASDAQ:ULCC), opting to proceed with its existing restructuring plan, the company announced on Tuesday.
Frontier’s latest offer, submitted on February 4, 2025, proposed that Spirit’s stakeholders receive $400 million in second-lien debt and a 19% equity stake in the combined entity. The proposal also suggested bypassing Spirit’s planned $350 million equity rights offering and waiving a $35 million termination fee associated with a prior agreement.
Spirit’s management concluded that the proposal would deliver less value to stakeholders compared to the current restructuring plan, the company said in a statement.
They also expressed concerns about potential delays, increased costs, and uncertainties related to regulatory and court approvals inherent in Frontier’s proposal.
Spirit presented a counterproposal on February 7, which Frontier subsequently rejected on February 10, reaffirming its initial offer.
Spirit emphasized its commitment to expediting its restructuring process, aiming to significantly reduce debt.
A hearing to consider confirmation of Spirit’s plan of reorganization is scheduled for February 13, 2025, with the company anticipating completion of the restructuring within the first quarter.
This development follows Spirit’s Chapter 11 bankruptcy filing in November 2024, after previous merger attempts with both Frontier and JetBlue Airways Corp (NASDAQ:JBLU) were unsuccessful.