Why Spirit Airlines Soared Today While JetBlue Sank
Is a new merger about to happen in the airline industry?
That seems a likely possibility, as on Tuesday JetBlue (NASDAQ: JBLU) submitted a proposal to acquire budget carrier Spirit Airlines (NYSE: SAVE). 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.
Source Fool.com
