Spirit rejects latest merger bid from Frontier, continues with restructuring

Spirit Airlines has rejected Frontier Group’s latest merger offer, stating that it is less beneficial to shareholders compared to the airline’s current restructuring plan.  

On February 11, 2025, Spirit Airlines issued a statement providing an update on its restructuring process regarding a new proposal from Frontier Group, the parent company of Frontier Airlines. 

Frontier’s latest offer repeated its proposal from February 4, 2025, which included $400 million principal amount of second-lien debt for Spirit’s stakeholders and 19% of Frontier’s common equity. The proposal would eliminate the need for Spirit to complete its previously announced $350 million equity rights offer and required a waiver of the Bankruptcy Court-approved $35 million termination fee. 

However, Spirit pointed out that Frontier’s proposal did not address certain material risks and issues previously identified by the airline. The carrier said that the proposal would deliver “less in value to the company’s stakeholders than contemplated by the company’s existing plan of reorganization.” 

Spirit expressed concerns about the timing and completion of the proposal, which would result in “extended and more costly chapter 11 proceedings”. Additionally, the airline is uncertain about obtaining the necessary regulatory and court approvals. 

This is not the first time Spirit has rejected a merger with Frontier Airlines. On January 31, 2025, the carrier rejected a similar merger offer from Frontier Group, stating that the proposal was “insufficient”. 

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On February 7, 2025, Spirit made a counterproposal to Frontier. According to the airline, the $600 million aggregate value of the debt and $1.185 billion equity to be provided to Spirit stakeholders under the counterproposal was equal to the amount of value that Frontier claimed it was providing to Spirit stakeholders under the latest merger proposal. 

Spirit’s counterproposal would allow the airline to skip its planned equity rights offering but would require Frontier to pay a $35 million termination fee.  

Frontier turned down Spirit’s counterproposal on February 10, 2025, and reiterated its initial merger proposal. 

Spirit will continue to conclude its restructuring process, which the company believes will strengthen its position for “long-term success”. A hearing to confirm Spirit’s reorganization plan is set for February 13, 2025. Nearly all voting creditors, around 99.99%, have approved the plan. Only two objections remain unresolved. 

Spirit expects to complete the restructuring process in the first quarter of 2025. The post Spirit rejects latest merger bid from Frontier, continues with restructuring appeared first on AeroTime.

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