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KEY TAKEAWAYS
- Spirit Airlines shares are surging in premarket trading Wednesday on a report that Frontier Airlines parent Frontier Group Holdings is in the early stages of a renewed bid for its rival discount carrier.
- The Wall Street Journal said the two sides have had recent discussions and the deal would form part of Spirit’s debt restructuring.
- Spirit is currently in the midst of discussions with bondholders ahead of a potential bankruptcy filing, the report said, noting that merger talks are in early stages and may not result in a deal.
Spirit Airlines (SAVE) shares are surging nearly 20% in premarket trading Wednesday on a report that Frontier Airlines parent Frontier Group Holdings (ULCC) is in the early stages of a renewed bid for its rival discount carrier.
The Wall Street Journal said the two sides have had recent discussions and a deal would form part of Spirit’s debt restructuring. Spirit is currently in the midst of discussions with bondholders ahead of a potential bankruptcy filing, the report said, noting that merger talks are in early stages and may not result in a deal.
Spirit last week extended a deadline for debt refinancing with Visa (V) and Mastercard (MA).
Frontier Tried To Buy Spirit in 2022
Frontier’s initial plan to buy Spirit in 2022 fell apart after JetBlue Airways (JBLU) swooped in with an offer deemed superior. The JetBlue deal, which would have created the U.S.’s fifth-largest carrier, was called off in March amid antitrust scrutiny from regulators, causing Spirit’s stock to crater.
Even after today’s premarket surge, Spirit shares have lost 85% of their value this year. Frontier Group shares are little changed but have gained more than 20% in 2024.