JBLU - This Airline Just Got Magnificent News. Investors Didn't Notice.
2023-05-28 09:03:00 ET
Last July, Spirit Airlines (NYSE: SAVE) agreed to be acquired by JetBlue Airways (NASDAQ: JBLU) . On the day its board of directors approved the deal, Spirit Airlines shares closed above $25. Since then, the stock has been in freefall, recently reaching a new multiyear low below $15.
Spirit Airlines stock trades for less than half of the planned acquisition price. While the federal government wants to block the merger, a recent decision in a separate antitrust case to block JetBlue's partnership with American Airlines (NASDAQ: AAL) makes it more likely that the Spirit-JetBlue merger will ultimately be approved. Moreover, moderating jet fuel prices bode well for Spirit's stand-alone profitability.
JetBlue has agreed to buy Spirit Airlines for $33.50 per share in cash, including $2.50 prepaid last year and an additional $0.10 per share (up to $1.80) paid each month until the deal is closed or terminated. The total payment can increase to as much as $34.15 if closing is delayed until next July.
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This Airline Just Got Magnificent News. Investors Didn't Notice.