Frontier is looking to acquire Spirit again. In SEC filings on Wednesday, the two ultra-low-cost carriers said they resumed merger talks on Jan. 7.
As part of the deal, Frontier offered the issuance of a $400 million principal amount of debt and 19% of the carrier’s common equity to holders of Spirit’s secured notes. Frontier added that a combination with Spirit would bring “unmatched benefits.”
“Our Proposal represents a compelling opportunity for your creditors and stockholders to receive a significant premium for their investment in Spirit, with greater value than the proposed transaction as described in the Plan,” a letter said. “We firmly believe that our Proposal is in the best interests of your creditors and stockholders and that they will benefit from your cooperation with us to allow them to realize the benefits of our Proposal.”
A Third Attempt
Frontier and Spirit have engaged in merger talks before and as recently as November 2024. The two airlines confirmed reports of these discussions in their respective filings.
But these talks were later discontinued, and Spirit filed for Chapter 11 bankruptcy protection on Nov. 18.
The two carriers also attempted to merge in 2022. However, JetBlue outbid Frontier in a $3.8 million deal that a U.S. judge ultimately threw out.
In a Jan. 11 response to Frontier’s initial letter, Spirit said the offer “fell short.” $400 million in debt is less than half of what would be provided to creditors under its reorganization plan, the company said.
Frontier noted that no agreement has been reached between the two airlines. Ongoing discussions may not result in a deal, the carrier added in its filing.
Should a transaction be finalized, Frontier and Spirit would become the fifth-largest U.S. airline, with plans to serve 100 million passengers per year.
