Spirit rejects JetBlue takeover bid on antitrust risks
STORY: Spirit Airlines rejected JetBlue's buyout offer Monday, saying it had little chance of winning approval from government regulators.
In a letter to JetBlue's CEO, Spirit said a deal "has a low probability of receiving antitrust clearance so long as JetBlue's Northeast Alliance with American Airlines remains in existence."
The Justice Department and six states in September sued to unwind JetBlue and American's "Northeast Alliance" partnership, alleging the agreement would lead to higher fares in busy northeastern U.S. airports.
JetBlue had enhanced its offer on Friday and promised a $200 million reverse break-up fee if the deal does not go through for antitrust reasons.
On Monday, JetBlue said it would offer a remedy package to address regulatory concerns.
Meanwhile, Frontier is still in the hunt for Spirit.
JetBlue's $33-per-share takeover offer is significantly higher than the current cash and stock bid from Frontier, which offered roughly $21.88 per share in February.
Frontier and JetBlue are in a battle for Spirit to better compete with the "big four" airlines - Delta, United, American and Southwest - which control nearly 80% of the U.S. market.
Spirit shares fell more than 9% on Monday morning. Frontier dropped as much as 5%, while JetBlue shares rose more than 2%.