Spirit Airlines Rejects Frontier Group’s Latest Merger Offer
Spirit Airlines has once again rejected a merger proposal from Frontier Group, the parent company of Frontier Airlines, asserting that it would be less beneficial to shareholders compared to its ongoing restructuring plan. The airline issued a statement on February 11, 2025, updating stakeholders on the status of its restructuring and the latest offer from Frontier.
Frontier’s most recent offer, made on February 4, 2025, mirrored a prior proposal that included $400 million in second-lien debt for Spirit’s stakeholders and 19% of Frontier’s common equity. This offer was presented as an alternative to Spirit’s previously announced $350 million equity rights offering and required the waiving of a $35 million termination fee approved by the Bankruptcy Court.
However, Spirit raised several concerns regarding Frontier’s proposal. The airline stated that the offer did not address certain material risks that had been identified previously, and that it would provide “less in value to the company’s stakeholders” than the airline’s current plan of reorganization. Spirit also expressed worries about the timing and potential delays involved in completing the merger, which could lead to more costly and extended chapter 11 proceedings. Additionally, the airline questioned the likelihood of obtaining the necessary regulatory and court approvals for the deal.
This marks the second time Spirit has rejected a merger offer from Frontier, the first being on January 31, 2025, when Spirit called the proposal “insufficient.”
On February 7, 2025, Spirit made a counterproposal to Frontier, offering a deal that would provide $600 million in debt and $1.185 billion in equity to Spirit stakeholders—an amount equal to the value Frontier had claimed it was offering. This counterproposal would allow Spirit to bypass its planned equity rights offering, but it required Frontier to pay the $35 million termination fee. Frontier rejected Spirit’s counteroffer on February 10, 2025, and reiterated its initial merger proposal.
Despite the ongoing merger talks, Spirit remains focused on completing its restructuring process, which it believes will position the company for long-term success. The airline’s reorganization plan is set for a confirmation hearing on February 13, 2025, with nearly 99.99% of voting creditors approving the plan. Only two objections remain unresolved, and Spirit expects to complete the restructuring process by the end of the first quarter of 2025.
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