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Its shares are down 75% from the closing price the day the deal was originally announced, and they fell another 10% in premarket trading Monday on the news. Shares of Spirit closed Friday at $6.46 a share, giving it a market cap of just over $700 million. It has been clear for months that Spirit is no long worth the $3.8 billion, or $33.50 a share, that JetBlue agreed to pay for the airline.Įven before federal Judge William Young issued the ruling blocking the deal, a decision that sent the price of Spirit shares plunging, its shares were trading at half the purchase price, or less, over course of the last six months, and only two-thirds of the price at the time the deal was agreed upon in July 2022. JetBlue had signaled it might pull out of the deal in a January filing with the Securities and Exchange Commission, shortly after the judge’s decision. Spirit has struggled with losses for several years as larger airlines have returned to profitability since demand for flying resumed after the height of the pandemic. There is even the possibility that it could lead to a bankruptcy filing and liquidation for Spirit, according to at least one airline analyst. The decision could spark a new bidding war for Spirit.
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“However, we remain confident in our future as a successful independent airline.” “We are disappointed we cannot move forward with a deal,” Spirit CEO Ted Christie said.
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Spirit said it was always prepared to continue as an independent airline, given the regulatory challenges the deal faced. “Given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently,” said JetBlue CEO Joanna Geraghty. While the companies had appealed the judge’s ruling blocking the deal, JetBlue and Spirit both issued statements saying it had become clear they wouldn’t be able to overcome the legal obstacles to complete the merger. JetBlue agreed to pay Spirit $69 million as part of its decision to end the deal, JetBlue said. Spirit has been a leader in the segment of the airline industry that offers very low, no-frills base fares that required passengers to pay extra for everything, including carry-on baggage. The Justice Department had argued that airfares could go up if Spirit was no longer an independent airline. The decision comes in the wake of a federal court ruling blocking the deal from taking place on antitrust grounds. JetBlue Airways announced Monday it is pulling out of its deal to purchase Spirit Airlines.