Is a new merger about to happen in the airline industry?
That seems a likely possibility, as on Tuesday JetBlue (JBLU -0.73%) submitted a proposal to acquire budget carrier Spirit Airlines (SAVE 0.14%). As often happens in takeover offers, the stock price of the offering party fell while that of the potential acquired asset rose sharply. JetBlue's stock tumbled by just over 7% on the day, while Spirit's zoomed 22% higher.
In its unsolicited bid for Spirit, JetBlue is offering $33 per share in an all-cash transaction, putting the total value of the deal at $3.6 billion. The potentially acquiring airline didn't hesitate to point out that the per-share price represents a 50% premium to Spirit's closing stock price on Monday.
In JetBlue's press release on the offer, CEO Robin Hayes said the merger "would be a game changer in our ability to deliver superior value on a national scale to customers, crewmembers, communities, and shareholders."
"The transaction would accelerate our strategic growth and create sustained, long-term value for the stakeholders in both companies," he added.
For its part, Spirit confirmed receipt of the offer in a press release, and said its board of directors would "work with its financial and legal advisors to evaluate JetBlue's proposal and pursue the course of action it determines to be in the best interests of Spirit and its stockholders."
Spirit is clearly an attractive bride. In February, it agreed to be acquired by Frontier Group Holdings. That arrangement -- which is valued at around $2.9 billion -- was pending when JetBlue swooped in from above. Frontier hasn't yet officially commented on JetBlue's move.
So with two suitors hoping to walk down the aisle, this takeover story is about to get quite interesting. Watch this space to see how it develops.