By Alice Seeley

Spirit Airlines has rejected JetBlue Airlines’ $33-per-share takeover offer, claiming the deal had little chance of regulatory approval.

In a letter addressed to JetBlue, Spirit Airline executives stated they had determined that JetBlue’s acquisition offer would be unlikely to secure regulatory approval as long as that airline’s recently announced partnership with American Airlines was in effect. The Justice Department and several states have sued to block that alliance, arguing that it is anticompetitive. JetBlue has said it will not abandon the partnership.

In February of this year, before JetBlue proposed its offer, Spirit and Frontier announced their decision to merge. Frontier offered to buy Spirit in a cash and stock deal valued at $2.9 billion. Following Frontier’s offer, JetBlue offered Spirit an all-cash deal of $3.6 billion. The airline even offered an additional $200 million break-up payout if antitrust issues prevented the deal from going through. Despite all this, Spirit still rejected the deal, citing JetBlue’s North American Alliance with American Airlines as its main concern.

The chairman of Spirit’s board of directors, Mac Gardner, announced that the company still plans to merge with Frontier Airlines, a deal that predates JetBlue’s offer that Spirit argued reflected the best interests of long-term shareholders.

“After a thorough review and extensive dialogue with JetBlue, the board determined that the JetBlue proposal involves an unacceptable level of closing risk that would be assumed by Spirit stockholders,” Gardner said. “We believe that our pending merger with Frontier will start an exciting new chapter for Spirit and will deliver many benefits to Spirit shareholders, team members, and guests.”

Additionally, Gardner stated JetBlue’s offer posed an “unacceptable level of closing risk that would be assumed by Spirit stockholders.”

JetBlue’s CEO Robin Hayes addressed the concerns raised by Spirit, saying, “We’ve added financial protections for Spirit and their shareholders in the event the deal isn’t approved by the government or in court.”

In a press release, Hayes added that “Spirit shareholders would be better off with the certainty of our substantial cash premium, regulatory commitments, and reverse break-up fee protection. The Frontier transaction has a similar regulatory profile to ours but offers no divestiture commitment and no reverse break-up fee, while the uncertain value of Frontier’s stock exposes Spirit shareholders to significant risk.”