Jetblue Airways Corp SC TO-T, filed May 16, 2022
Jetblue Airways Corp (JBLU)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement Pursuant to Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
Spirit Airlines, Inc.
(Name of Subject Company)
Sundown Acquisition Corp.
(Offeror)
a direct wholly-owned subsidiary of
JetBlue Airways Corporation
(Parent of Offeror)
(Names of Filing Persons (identifying status as offeror, issuer or other person))
Common Stock, $0.0001 par value per share
(Title of Class of Securities)
848577102
(CUSIP Number of Class of Securities)
Brandon Nelson
General Counsel and Corporate Secretary
27-01 Queens Plaza North
Long Island City
New York, NY 11101
(718) 286-7900
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)
With a copy to:
Daniel Litowitz
Derrick Lott
Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022
(212) 848-4000
| ☐ | Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| Amount Previously Paid: | Not applicable | Filing Party: | Not applicable | |||
| Form or Registration No.: | Not applicable | Date Filed: | Not applicable |
| ☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
| ☒ | third-party tender offer subject to Rule 14d-1. |
| ☐ | issuer tender offer subject to Rule 13e-4. |
| ☐ | going-private transaction subject to Rule 13e-3. |
| ☐ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer: ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
| ☐ | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
| ☐ | Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
This Tender Offer Statement on Schedule TO (together with any exhibits and annexes attached hereto, and as it may be amended or supplemented from time to time, this “Schedule TO”) is filed by (i) Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (“JetBlue”), and (ii) JetBlue. This Schedule TO relates to the offer by the Purchaser to purchase all of the outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), at $30.00 per share, net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2022 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and in the related Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”), copies of which are attached to and filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively. Pursuant to General Instruction F to Schedule TO, the information contained in the Offer to Purchase, including all schedules and annexes to the Offer to Purchase, is hereby expressly incorporated in this Schedule TO by reference in response to Items 1 through 11 of this Schedule TO and is supplemented by the information specifically provided for in this Schedule TO.
Item 1. Summary Term Sheet.
The information set forth in the section “Summary Term Sheet” of the Offer to Purchase is incorporated herein by reference.
Item 2. Subject Company Information.
(a) The subject company and issuer of the securities subject to the Offer is Spirit. Spirit’s principal executive office is located at 2800 Executive Way, Miramar, Florida 33025, and its telephone number is (954) 447-7920.
(b) This Schedule TO relates to all of the issued and outstanding Shares. According to Spirit, as of May 6, 2022, there were 108,618,703 Shares issued and outstanding.
(c) The information concerning the principal market in which the Shares are traded, and certain high and low sales prices for the Shares in that principal market, is set forth in the sections “Price Range of Shares; Dividends” and “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing; Registration Under the Exchange Act; Margin Regulations” of the Offer to Purchase and is incorporated herein by reference.
Item 3. Identity and Background of Filing Person.
(a), (b), (c) The information set forth in the sections “Summary Term Sheet,” “Introduction,” “Certain Information Concerning JetBlue and the Purchaser” and in Schedule I and Schedule II of the Offer to Purchase is incorporated herein by reference.
Item 4. Terms of the Transaction.
(a)(1)(i)—(viii), (xii) The information set forth in the sections “Summary Term Sheet,” “Introduction,” “Terms of the Offer,” “Acceptance for Payment and Payment for Shares,” “Procedure for Tendering Shares,” “Withdrawal Rights” and “Certain Material U.S. Federal Income Tax Consequences” is incorporated herein by reference.
(a)(1)(ix)—(xi) Not applicable.
(a)(2)(i)—(iv) and (vii) The information set forth in the sections “Summary Term Sheet,” “Introduction,” “Certain Material U.S. Federal Income Tax Consequences,” “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing; Registration Under the Exchange Act; Margin Regulations,” and “Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger” is incorporated herein by reference.
(a)(2)(v)—(vi) Not applicable.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(a), (b) The information set forth in the sections “Summary Term Sheet,” “Introduction,” “Certain Information Concerning JetBlue and the Purchaser,” “Background of the Offer; Other Transactions with Spirit,” “Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger,” and in Schedule I and Schedule II of the Offer to Purchase is incorporated herein by reference.
Item 6. Purposes of the Transaction and Plans or Proposals.
(a), (c)(1), (c)(3–7) The information set forth in the sections “Summary Term Sheet,” “Introduction,” “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing; Registration Under the Exchange Act; Margin Regulations,” “Background of the Offer; Other Transactions with Spirit,” “Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger,” and “Dividends and Distributions” of the Offer to Purchase is incorporated herein by reference.
(c)(2) None.
Item 7. Source and Amount of Funds or Other Consideration.
(a), (b), (d) The information set forth in the sections “Summary Term Sheet” and “Source and Amount of Funds” of the Offer to Purchase is incorporated herein by reference.
Item 8. Interest in Securities of the Subject Company.
(a), (b) The information set forth in the sections “Introduction,” “Certain Information Concerning JetBlue and the Purchaser,” and in Schedule I and Schedule II of the Offer to Purchase is incorporated herein by reference.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used.
(a) The information set forth in the sections “Introduction” and “Fees and Expenses” of the Offer to Purchase is incorporated herein by reference.
Item 10. Financial Statements.
(a), (b) Not applicable.
Item 11. Additional Information.
(a)(1) The information set forth in the sections “Certain Information Concerning JetBlue and the Purchaser,” “Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger” and “Background of the Offer; Other Transactions with Spirit” of the Offer to Purchase is incorporated herein by reference.
(a)(2) and (a)(3) The information set forth in the sections “Summary Term Sheet,” “Introduction,” “Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger,” “Background of the Offer; Other Transactions with Spirit,” “Conditions of the Offer” and “Certain Legal Matters; Regulatory Approvals; Appraisal Rights” of the Offer to Purchase is incorporated herein by reference.
(a)(4) The information set forth in the section “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing; Registration Under the Exchange Act; Margin Regulations” of the Offer to Purchase is incorporated herein by reference.
(a)(5) The information set forth in the section “Legal Proceedings” of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in the Offer to Purchase and the Letter of Transmittal, to the extent not otherwise incorporated herein by reference, is incorporated herein by reference.
| Item 12. | Exhibits. | |
| (a)(1)(A) | Offer to Purchase, dated May 16, 2022. | |
| (a)(1)(B) | Form of Letter of Transmittal. | |
| (a)(1)(C) | Form of Notice of Guaranteed Delivery. | |
| (a)(1)(D) | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
| (a)(1)(E) | Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
| (a)(1)(F) | Summary Advertisement, as published in The Wall Street Journal, dated May 16, 2022. | |
| (a)(2) | Not applicable. | |
| (a)(3) | Not applicable. | |
| (a)(4) | Not applicable. | |
| (a)(5)(A) | Press Release of JetBlue Airways Corporation, dated May 16, 2022. | |
| (b) | Not applicable. | |
| (d) | Confidentiality Agreement, dated April 8, 2022, by and between JetBlue Airways Corporation and Spirit Airlines, Inc. | |
| (g) | Not applicable. | |
| (h) | Not applicable. | |
| 107 | Filing Fee Table. | |
Item 13. Information Required by Schedule 13E-3.
Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: May 16, 2022
| SUNDOWN ACQUISITION CORP. | ||||
| By: | /s/ Brandon Nelson | |||
| Name: | Brandon Nelson | |||
| Title: | Secretary | |||
| JETBLUE AIRWAYS CORPORATION | ||||
| By: | /s/ Brandon Nelson | |||
| Name: | Brandon Nelson | |||
| Title: | General Counsel and Corporate Secretary | |||
EXHIBIT INDEX
| Index No. |
| |
| (a)(1)(A) | Offer to Purchase, dated May 16, 2022. | |
| (a)(1)(B) | Form of Letter of Transmittal. | |
| (a)(1)(C) | Form of Notice of Guaranteed Delivery. | |
| (a)(1)(D) | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
| (a)(1)(E) | Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
| (a)(1)(F) | Summary Advertisement, as published in The Wall Street Journal, dated May 16, 2022. | |
| (a)(2) | Not applicable. | |
| (a)(3) | Not applicable. | |
| (a)(4) | Not applicable. | |
| (a)(5)(A) | Press Release of JetBlue Airways Corporation, dated May 16, 2022. | |
| (b) | Not applicable. | |
| (d) | Confidentiality Agreement, dated April 8, 2022, by and between JetBlue Airways Corporation and Spirit Airlines, Inc. | |
| (g) | Not applicable. | |
| (h) | Not applicable. | |
| 107 | Filing Fee Table. | |
Exhibit (a)(1)(A)
OFFER TO PURCHASE FOR CASH
All Outstanding Shares of Common Stock
of
SPIRIT AIRLINES, INC.
at
$30.00 Net Per Share
by
SUNDOWN ACQUISITION CORP.,
a wholly-owned subsidiary
of
JETBLUE AIRWAYS CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 30, 2022, UNLESS THE OFFER IS EXTENDED.
Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (together with its subsidiaries, “JetBlue,” “we,” “our” or “us”), is offering to purchase all of the outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), at $30.00 per Share, net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time, this “Offer to Purchase”) and the related letter of transmittal that accompanies this Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”).
Consummation of the Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn on or prior to the Expiration Date (as defined in this Offer to Purchase) a number of Shares which, together with any Shares then owned by JetBlue and its subsidiaries (including the Purchaser), represents at least a majority of the total number of Shares outstanding on a fully diluted basis; (ii) the Agreement and Plan of Merger, dated February 5, 2022 (as amended from time to time, the “Frontier Merger Agreement”), among Spirit, Top Gun Acquisition Corp., a Delaware corporation (“Frontier Merger Sub”), and Frontier Group Holdings, Inc., a Delaware corporation, having been validly terminated in accordance with its terms; (iii) the Spirit stockholders having not adopted the Frontier Merger Agreement and not approved the transactions contemplated thereby; (iv) JetBlue, the Purchaser and Spirit having entered into a definitive merger agreement (in form and substance satisfactory to JetBlue in its reasonable discretion) with respect to the acquisition of Spirit by JetBlue providing for a second-step merger pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with Spirit surviving as a wholly-owned subsidiary of JetBlue, without the requirement for approval of any stockholder of Spirit, to be effected promptly following the consummation of the Offer, and such merger agreement having not been terminated and the conditions to effecting the Potential Merger (as defined in this Offer to Purchase) pursuant to Section 251(h) of the DGCL being satisfied upon the acceptance for payment of Shares tendered pursuant to the Offer; (v) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any customary timing agreement with any governmental entity to toll, stay, or extend any such waiting period, or to delay or not to consummate the Offer, having expired or been earlier terminated; (vi) all consents, registrations, notices, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders, and authorizations required to be obtained from, or delivered to, as applicable, the U.S. Federal Aviation Administration, the U.S. Department of
Transportation, and the Federal Communications Commission in connection with the consummation of the Offer having been obtained or delivered, as applicable; (vii) all other authorizations, consents, orders, approvals, filings, declarations and expirations of waiting periods required under the antitrust or competition laws of any foreign jurisdictions applicable to the transactions contemplated by this Offer to Purchase having been obtained; (viii) there not having occurred any change, event, circumstance, development, condition, occurrence or effect that, in the reasonable judgment of JetBlue has had, or would reasonably be expected to have, individually or in the aggregate, a Spirit Material Adverse Effect (as defined in this Offer to Purchase); (ix) Spirit or any of its subsidiaries or affiliates not being a party to any agreement or transaction having the effect of impairing, in the reasonable judgment of JetBlue, the Purchaser’s or JetBlue’s ability to acquire the Shares or Spirit or otherwise diminishing the expected value to JetBlue or its subsidiaries of the acquisition of Spirit; and (x) the Purchaser being satisfied, in its reasonable judgment, that it will not be subject to the restrictions of Section 203 of the DGCL. Other conditions to the Offer are described in the “The Offer — Section 14 — Conditions of the Offer.” Provided that all conditions of the Offer are satisfied or waived (if such condition is permitted to be waived pursuant to applicable law), the Purchaser will purchase all Shares validly tendered and not validly withdrawn on or prior to the Expiration Date (as defined in this Offer to Purchase).
Consummation of the Offer is not subject to any financing condition.
We are seeking to enter into a definitive agreement for the acquisition of Spirit by JetBlue, and are prepared to engage with Spirit immediately. We are making the Offer because the board of directors of Spirit (the “Spirit Board”) has refused to meaningfully engage with us with respect to our proposal to acquire all of the outstanding Shares for $33.00 per Share in cash, initially made on March 29, 2022, which we believe was clearly superior to the proposed merger contemplated by the Frontier Merger Agreement, pursuant to which Frontier Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving corporation (the “Proposed Frontier Transaction”). Although, under the terms of the Frontier Merger Agreement the Spirit Board is permitted to engage in discussions with us since they determined our proposal could reasonably be expected to result in a Superior Proposal (as defined in the Frontier Merger Agreement), the Spirit Board has refused to meaningfully engage with JetBlue with respect to a negotiated transaction. Given the unwillingness of the Spirit Board to share necessary diligence information or negotiate in good faith with us, the price per Share in our Offer is less than the price that we had initially offered to the Spirit Board on March 29, 2022. If the Spirit Board decides to constructively engage with us, we will work towards a consensual transaction to acquire all of the outstanding Shares for $33.00 per Share in cash, subject to receiving the information to support the higher price. Because we believe our proposal to acquire Spirit is clearly a Superior Proposal, we are making the Offer directly to Spirit stockholders on the terms and conditions set forth in this Offer to Purchase as an alternative to the Proposed Frontier Transaction.
Subject to applicable law, we reserve the right to amend the Offer in any respect (including amending the Offer Price). In addition, in the event that we enter into a merger agreement with Spirit and such merger agreement does not provide for a tender offer, we reserve the right to terminate the Offer, in which case the Shares would, upon consummation of such merger, be converted into the right to receive the consideration negotiated by us and Spirit and specified in such merger agreement.
The Offer has not been approved or disapproved by the U.S. Securities and Exchange Commission (“SEC”) or any state securities commission, nor has the SEC or any state securities commission passed upon the fairness or merits of the Offer or upon the accuracy or adequacy of the information contained in this Offer to Purchase or the Letter of Transmittal. Any representation to the contrary is a criminal offense.
This Offer to Purchase and the Letter of Transmittal contain important information, and you should carefully read both in their entirety before making a decision with respect to the Offer.
May 16, 2022
2
IMPORTANT
Any stockholder of Spirit who desires to tender all or a portion of such stockholder’s Shares in the Offer should either: (i) complete and sign the accompanying Letter of Transmittal or a manually signed facsimile thereof in accordance with the instructions in the Letter of Transmittal, and mail or deliver the Letter of Transmittal together with the certificates representing tendered Shares and all other required documents to Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), or tender such Shares pursuant to the procedure for book-entry transfer set forth in “The Offer — Section 3 — Procedure for Tendering Shares”; or (ii) request that such stockholder’s broker, dealer, commercial bank, trust company or other nominee effect the transaction for such stockholder. Stockholders whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such person if they desire to tender their Shares.
Any stockholder who desires to tender Shares and whose certificates representing such Shares are not immediately available or who cannot deliver such certificates and all other required documents to the Depositary on or prior to the Expiration Date, or who cannot comply with the procedures for book-entry transfer on a timely basis, may tender such Shares pursuant to the guaranteed delivery procedure set forth in “The Offer — Section 3 — Procedure for Tendering Shares.”
Questions and requests for assistance may be directed to Innisfree M&A Incorporated, our information agent for the Offer (“Innisfree”), at Innisfree’s telephone numbers set forth on the back cover of this Offer to Purchase. Requests for copies of this Offer to Purchase, the Letter of Transmittal and all other related materials may be directed to Innisfree or your brokers, dealers, commercial banks and trust companies, and copies will be furnished promptly at the Purchaser’s expense. Additionally, this Offer to Purchase, the Letter of Transmittal and other materials relating to the Offer may be found at https://www.sec.gov.
This Offer to Purchase and the Letter of Transmittal contain important information, and you should carefully read both in their entirety before making a decision with respect to the Offer.
Neither this Offer to Purchase nor the Offer constitutes a solicitation of proxies for any meeting of the stockholders of Spirit, including our solicitation of proxies to be used at the special meeting of Spirit stockholders scheduled to be held on June 10, 2022 (the “Special Meeting”) in connection with the Proposed Frontier Transaction and any other matter to be considered at the Special Meeting. Any solicitation of proxies has been or will be made only pursuant to separate proxy solicitation materials complying with the requirements of Section 14(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Unless your Shares are accepted for payment pursuant to the terms and conditions of the Offer prior to the Special Meeting, tendering your Shares pursuant to the Offer will not grant us your proxy with respect to the Special Meeting and is not the same as a vote against the matters to be voted upon at the Special Meeting. For more information on our proxy solicitation with respect to the Special Meeting, please read the definitive proxy statement we will file with the SEC and mail to the Spirit stockholders in opposition to the Proposed Frontier Transaction and other related documents we file with the SEC.
3
TABLE OF CONTENTS
4
Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (“JetBlue”), is offering to purchase all of the outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), at $30.00 per Share, net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time, this “Offer to Purchase”) and the related letter of transmittal that accompanies this Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”).
The following are certain questions you may have as a Spirit stockholder and answers to those questions. You should carefully read this Offer to Purchase and the accompanying Letter of Transmittal in their entirety because the information in this summary term sheet is not complete and additional important information is contained in the remainder of this Offer to Purchase and the Letter of Transmittal. We have included cross-references in this summary term sheet to other sections of this Offer to Purchase where you will find more complete descriptions of the topics mentioned below.
The information concerning Spirit or Frontier Group Holdings, Inc., a Delaware corporation (“Frontier”), contained herein and elsewhere in this Offer to Purchase has been taken from or is based upon publicly available documents or records of Spirit or Frontier on file with the U.S. Securities and Exchange Commission (the “SEC”) or other public sources at the time of the Offer. We have not independently verified the accuracy and completeness of such information. We have no knowledge that would indicate that any statements contained herein relating to Spirit or Frontier taken from or based upon such documents and records are untrue or incomplete in any material respect.
In this Offer to Purchase, unless the context requires otherwise, the terms “we,” “our” and “us” refer to JetBlue and its subsidiaries (including the Purchaser), collectively.
Who is offering to buy my securities?
The Purchaser, Sundown Acquisition Corp., is a Delaware corporation formed for the purpose of making the Offer to acquire the Shares subject to the terms and conditions set forth herein. The Purchaser is a direct wholly-owned subsidiary of JetBlue. JetBlue is a publicly-traded airline which provides award-winning service and a distinctive flying experience — the “JetBlue Experience” — and serves over 100 destinations across the United States, the Caribbean and Latin America, and between New York and London. See “The Offer — Section 9 — Certain Information Concerning JetBlue and Purchaser.”
What are you offering to purchase?
We are offering to acquire all of the outstanding Shares. We refer to one share of Spirit common stock as a “Share.” See “Introduction.”
How much are you offering to pay for my Shares?
We are offering to pay you $30.00 per Share, in cash, without interest and less any required withholding taxes. If you are the record owner of your Shares and you directly tender your Shares to us in the Offer, you will not be required to pay brokerage fees or similar expenses. If you own your Shares through a broker, dealer, commercial bank, trust company or other nominee, and your broker, dealer, commercial bank, trust company or other nominee tenders your Shares on your behalf, it may charge you a fee for doing so. You should consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply. See “Introduction.”
-5-
Why are you making the Offer?
On February 7, 2022, Spirit and Frontier announced that they had entered into that certain Agreement and Plan of Merger, dated February 5, 2022 (as amended from time to time, the “Frontier Merger Agreement”), among Spirit, Top Gun Acquisition Corp., a Delaware corporation (“Frontier Merger Sub”), and Frontier, pursuant to which Frontier Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving corporation (the “Proposed Frontier Transaction”), and at the effective time of the Proposed Frontier Transaction, each outstanding Share (other than Shares held by Frontier, Spirit or their respective subsidiaries immediately prior to the effective time and Shares as to which dissenters’ rights have been properly perfected) will be converted into the right to receive $2.13 in cash, without interest, and 1.9126 shares of the voting common stock of Frontier. Spirit, however, is permitted, pursuant to the terms of the Frontier Merger Agreement, and subject to certain conditions, to terminate the Frontier Merger Agreement in order to enter into a definitive agreement for a Superior Proposal (as defined in the Frontier Merger Agreement) made by another party.
We are making the Offer because the Spirit Board has refused to meaningfully engage with us with respect to our proposal to acquire all of the outstanding Shares for $33.00 per Share in cash, initially made on March 29, 2022, which we believe was clearly superior to the Proposed Frontier Transaction. Given the Spirit Board’s unwillingness to share necessary diligence information or negotiate in good faith with us, the price per Share in our Offer is less than the price that we had initially offered to the Spirit Board on March 29, 2022. If the Spirit Board decides to constructively engage with us, we will work towards a consensual transaction to acquire all of the outstanding Shares for $33.00 per Share in cash, subject to receiving the information to support the higher price. The valid termination of the Frontier Merger Agreement is a condition to the Offer. See “The Offer — Section 14 — Conditions to the Offer.”
In addition, we are making the Offer because we want to acquire control of, and ultimately acquire the entire equity interest in, Spirit while allowing Spirit stockholders an opportunity to receive the Offer Price upon the satisfaction of certain conditions by tendering their Shares into the Offer. If the Offer is consummated, we intend to complete a second-step merger with Spirit in which Spirit will become a wholly-owned subsidiary of JetBlue and all of the outstanding Shares that are not purchased in the Offer (other than Shares held by JetBlue, the Purchaser, Spirit or their respective subsidiaries immediately prior to the effective time and Shares as to which dissenters’ rights have been properly perfected) will be exchanged for an amount in cash per Share equal to the Offer Price, without interest and less any required withholding taxes (as further described herein, the “Potential Merger”). See “The Offer — Section 12 — Purpose of the Offer; Plans for Spirit; Potential Merger; Section 203.”
JetBlue and the Purchaser are seeking to negotiate a definitive agreement for the acquisition of Spirit by JetBlue and are prepared to engage in such negotiations immediately.
How does the Offer relate to JetBlue’s proxy solicitation with respect to the special meeting of Spirit stockholders for proposals relating to the Proposed Frontier Transaction?
Since March 29, 2022, when, following the announcement by Spirit and Frontier of the Frontier Merger Agreement, JetBlue sent a proposal to Spirit, JetBlue has expressed to Spirit our desire to enter into a negotiated business combination with Spirit and has publicly announced the two proposal letters that JetBlue has submitted to the Spirit Board. In the most recent of these proposal letters, announced by JetBlue on May 2, 2022, JetBlue proposed to: (i) acquire each outstanding Share for $33.00 in cash; (ii) litigate and divest assets of JetBlue and Spirit, including all of Spirit’s assets at the Northeast Alliance airports, up to a Spirit Material Adverse Effect (with a limited carve-out to this divestiture obligation for actions that would result in a “Burdensome Condition” under JetBlue’s Northeast Alliance); and (iii) agree to a $200 million “reverse break-up fee” in the event the requisite antitrust approvals were unable to be obtained. Although, under the terms of the Frontier Merger Agreement the Spirit Board is permitted to engage in discussions with us since they determined our proposal could reasonably be expected to result in a Superior Proposal (as defined in
-6-
the Frontier Merger Agreement), the Spirit Board has refused to meaningfully engage with JetBlue with respect to a negotiated transaction. Given the Spirit Board’s unwillingness to share necessary diligence information or negotiate in good faith with us, the price per Share in our Offer is less than the price that we had initially offered to the Spirit Board on March 29, 2022. If the Spirit Board decides to constructively engage with us, we will work towards a consensual transaction to acquire all of the outstanding Shares for $33.00 per Share in cash, subject to receiving the information to support the higher price. Because we believe our proposal to acquire Spirit is clearly a Superior Proposal, we are making the Offer directly to Spirit stockholders on the terms and conditions set forth in this Offer to Purchase as an alternative to the Proposed Frontier Transaction.
Completion of the Proposed Frontier Transaction requires the Spirit stockholders to adopt the Frontier Merger Agreement and approve the Proposed Frontier Transaction (the “Frontier Merger Proposal”). According to the definitive proxy statement filed by Spirit on Schedule 14A with the SEC on May 11, 2022 (as may be amended from time to time thereafter, the “Spirit Definitive Proxy Statement”), Spirit will submit the Frontier Merger Proposal together with two other related proposals to a special meeting of Spirit stockholders on June 10, 2022 (the “Special Meeting”) for approval. Because we would like to give the Spirit stockholders the opportunity to benefit from our $30.00 per Share proposal, we will file a definitive proxy statement with the SEC (the “JetBlue Definitive Proxy Statement”) to solicit proxies from Spirit stockholders to vote against the Frontier Merger Proposal and other proposals at the Special Meeting, and will mail the JetBlue Definitive Proxy Statement, including the BLUE proxy card, to Spirit stockholders.
Neither this Offer to Purchase nor the Offer constitutes a solicitation of proxies for any meeting of stockholders of Spirit, including our solicitation of proxies to be used at the Special Meeting in connection with the Frontier Merger Proposal and any other matter to be considered at the Special Meeting. Any such solicitation has been or will be made only pursuant to separate proxy solicitation materials complying with the requirements of Section 14(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Unless your Shares are accepted for payment pursuant to the terms and conditions of the Offer prior to the Special Meeting, tendering your Shares pursuant to the Offer will not grant us your proxy with respect to the Special Meeting and is not the same as a vote against the matters to be voted upon at the Special Meeting. For more information on our proxy solicitation with respect to the Special Meeting, please read the JetBlue Definitive Proxy Statement we file with the SEC and mail to the Spirit stockholders in opposition to the Proposed Frontier Transaction and other related documents we file with the SEC.
What does the Spirit Board think of the Offer?
As of the date of this Offer to Purchase, the Spirit Board has not provided its recommendation for this Offer. On April 7, 2022, the Spirit Board determined that the offer set forth in the letter from JetBlue to Spirit, dated March 29, 2022, could reasonably be likely to lead to a Superior Proposal (as defined in the Frontier Merger Agreement). See “The Offer — Section 11 — Background of the Offer; Other Transactions with Spirit.” However, since that date, neither the Spirit Board nor Spirit’s management has meaningfully engaged with us to allow us to finalize the terms of our proposal so that the Spirit Board could declare it a “Superior Proposal” under the Frontier Merger Agreement. As of the date of this Offer to Purchase, the Spirit Board has not changed its recommendation for the Proposed Frontier Transaction. Within ten business days after the date of this Offer to Purchase, Spirit is required by law to publish, send or give to you (and file with the SEC) a statement as to whether it recommends acceptance or rejection of the Offer, that it has no opinion with respect to the Offer or that it is unable to take a position with respect to the Offer.
Do you have the financial resources to pay for the Shares?
Yes. The total amount of funds required by the Purchaser to consummate the Offer and purchase all of the outstanding Shares in the Offer is approximately $3.38 billion, plus related fees and expenses. JetBlue will provide the Purchaser with sufficient funds to purchase all of the Shares validly tendered in the Offer. We expect
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to fund such amount with cash on hand and proceeds from future financing transactions, including term loans and/or offerings in the debt capital markets. In addition, we have agreed to the terms of a commitment letter that has been executed by Goldman Sachs Bank USA (“GS Bank”) and Bank of America, N.A. (“Bank of America” and, together with GS Bank and any other initial lenders, the “Initial Lenders”) for a senior secured bridge facility in an aggregate principal amount of up to $3,500.0 million (the “Bridge Facility”). Based upon the combination of cash on hand and proceeds from future financing transactions (or amounts available under the Bridge Facility if such financing transactions are not completed), we expect to have sufficient funds to pay the Offer Price for all Shares in the Offer. See “The Offer — Section 10 — Source and Amount of Funds.”
The Bridge Facility arranged for us in connection with the Offer provides for a “certain funds” commitment and does not contain any financial covenants that would prevent us from consummating the Offer. See “The Offer — Section 10 — Source and Amount of Funds.”
The consummation of the Offer is not subject to any financing condition.
Is your financial condition material to my decision to tender in the Offer?
We do not believe that our financial condition is material to your decision whether to tender Shares and accept the Offer because the Offer is being made for all Shares solely for cash. The Offer is not subject to any financing condition; and as described in “The Offer — Section 10 — Source and Amount of Funds” below, the Purchaser, through JetBlue, will have sufficient funds available to purchase all Shares validly tendered into the Offer. The Bridge Facility (as defined in “The Offer — Section 10 — Source and Amount of Funds”) arranged for JetBlue in connection with the Offer provides for a “certain funds” commitment and does not contain any financial covenants that would prevent JetBlue from consummating the Offer.
What are the most significant conditions to the Offer?
Consummation of the Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn on or prior to the Expiration Date (as defined in this Offer to Purchase) a number of Shares, which, together with any Shares then owned by JetBlue and its subsidiaries (including the Purchaser), represents at least a majority of the total number of Shares outstanding on a fully diluted basis; (ii) the Frontier Merger Agreement having been validly terminated in accordance with its terms; (iii) the Spirit stockholders having not adopted the Frontier Merger Agreement and not approved the transactions contemplated thereby; (iv) JetBlue, the Purchaser and Spirit having entered into a definitive merger agreement (in form and substance satisfactory to JetBlue in its reasonable discretion) with respect to the acquisition of Spirit by JetBlue providing for a second-step merger pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with Spirit surviving as a wholly-owned subsidiary of JetBlue, without the requirement for approval of any stockholder of Spirit, to be effected promptly following the consummation of the Offer, and such merger agreement having not been terminated and the conditions to effecting the Potential Merger pursuant to Section 251(h) of the DGCL being satisfied upon the acceptance for payment of Shares tendered pursuant to the Offer; (v) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any customary timing agreement with any governmental entity to toll, stay, or extend any such waiting period, or to delay or not to consummate the Offer, having expired or been earlier terminated; (vi) all consents, registrations, notices, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders, and authorizations required to be obtained from, or delivered to, as applicable, the U.S. Federal Aviation Administration, the U.S. Department of Transportation, and the Federal Communications Commission in connection with the consummation of the Offer having been obtained or delivered, as applicable; (vii) all other authorizations, consents, orders, approvals, filings, declarations and expirations of waiting periods required under the antitrust or competition laws of any foreign jurisdictions applicable to the transactions contemplated by this Offer to Purchase having been obtained; (viii) there not having occurred any change, event, circumstance, development, condition, occurrence or effect that, in the reasonable judgment of JetBlue, has had, or would reasonably be expected to have, individually or in the aggregate, a Spirit Material Adverse Effect (as defined in
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this Offer to Purchase); (ix) Spirit or any of its subsidiaries or affiliates not being a party to any agreement or transaction having the effect of impairing, in the reasonable judgment of the Purchaser’s or JetBlue’s ability to acquire the Shares or Spirit or otherwise diminishing the expected value to JetBlue or its subsidiaries of the acquisition of Spirit; and (x) the Purchaser being satisfied, in its reasonable judgment, that it will not be subject to the restrictions of Section 203 of the DGCL. Other conditions to the Offer are described in the “The Offer — Section 14 — Conditions of the Offer.” Provided that all conditions of the Offer are satisfied or waived (if such condition is permitted to be waived pursuant to applicable law), the Purchaser will purchase all Shares validly tendered and not validly withdrawn on or prior to the Expiration Date.
Is the Offer subject to any financing condition?
Consummation of the Offer is not subject to any financing condition. See “The Offer — Section 14 — Conditions of the Offer.”
How long do I have to decide whether to tender in the Offer?
You have until the expiration date of the Offer to tender. The Offer currently is scheduled to expire at 5:00 p.m., New York City time, on June 30, 2022. However, as described below and in “The Offer — Section 1 — Terms of the Offer,” we may, in our sole discretion, extend the expiration date of the Offer at any time or from time to time for any reason. If the Offer is extended, we will issue a press release announcing the extension no later than 9:00 a.m., New York City time, on the next business day after the date the Offer was scheduled to expire.
How long will it take to consummate the Offer?
The timing for consummation of the Offer will depend on the satisfaction of the conditions of the Offer. Because the conditions are beyond our control, there can be no certainty as to when, and whether, we will be able to consummate the Offer. See “The Offer — Section 14 — Conditions of the Offer.”
Can the Offer be extended and under what circumstances?
We may, in our sole discretion, extend the Offer at any time or from time to time for any reason. We might extend the Offer, for example, if any of the conditions specified in “The Offer — Section 14 — Conditions of the Offer” are not satisfied prior to the expiration of the Offer. If the Offer is extended, we will inform Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), of that fact and will issue a press release announcing the extension, no later than 9:00 a.m., New York City time, on the next business day after the date the Offer was scheduled to expire. See “The Offer — Section 1 —Terms of the Offer.”
How will I be notified if the Offer is extended?
If we decide to extend the Offer, we will inform the Depositary of that fact and issue a press release announcing the extension, no later than 9:00 a.m., New York City time, on the next business day after the date the Offer was scheduled to expire. See “The Offer — Section 1 — Terms of the Offer.”
Will there be a subsequent offering period?
No. Pursuant to Section 251(h) of the DGCL, we expect the Potential Merger to occur promptly after the consummation of the Offer.
How do I tender my Shares?
To tender Shares, you must deliver the certificates representing your Shares, together with a completed Letter of Transmittal and any other required documents, to the Depositary, or tender such Shares pursuant to the procedure for book-entry transfer set forth in “The Offer — Section 3 — Procedure for Tendering Shares —
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Book-Entry Transfer,” not later than the Expiration Date. If your Shares are held in street name by your broker, dealer, bank, trust company or other nominee, such nominee can tender your Shares through The Depository Trust Company.
If you cannot deliver everything required to make a valid tender to the Depositary on or prior to the Expiration Date, you may have a limited amount of additional time by having a financial institution (including most banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP), guarantee, pursuant to a Notice of Guaranteed Delivery, that the missing items will be received by the Depositary within two New York Stock Exchange (the “NYSE”) trading days. However, the Depositary must receive the missing items within that two-trading-day period. See “The Offer — Section 3 — Procedure for Tendering Shares.”
Can I withdraw tendered Shares? Until what time can I withdraw tendered Shares?
You can withdraw tendered Shares at any time before the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after July 15, 2022, which is the 60th day from the commencement of the Offer, unless we have already accepted such Shares for payment. See “The Offer — Section 4 — Withdrawal Rights.”
How do I withdraw tendered Shares?
To withdraw tendered Shares, you must deliver a written notice of withdrawal with the required information to the Depositary while you have the right to withdraw the Shares. See “The Offer — Section 4 — Withdrawal Rights.”
When and how will I be paid for my tendered Shares?
Upon the terms and subject to the conditions of the Offer, we will pay for all validly tendered and not validly withdrawn Shares promptly after the expiration of the Offer, assuming the satisfaction or waiver of the conditions to the Offer set forth in “The Offer — Section 14 — Conditions of the Offer” prior to the expiration of the Offer.
We will pay for your validly tendered and not validly withdrawn Shares by depositing the purchase price with the Depositary, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. In all cases, payment for tendered Shares will be made only after timely receipt by the Depositary of certificates for such Shares (or of a confirmation of a book-entry transfer of such Shares as described in “The Offer — Section 3 — Procedures for Tendering Shares”), a properly completed, timely received and duly executed Letter of Transmittal (or a manually signed facsimile thereof) or Agent’s Message (as defined in “The Offer — Section 3 — Procedures for Tendering Shares; Book-Entry Transfer”) in lieu of a Letter of Transmittal and any other required documents for such Shares. See “The Offer — Section 2 — Acceptance for Payment and Payment of Shares.”
Will the Offer be followed by a merger if all Shares are not tendered in the Offer?
If the conditions of the Offer are satisfied and we accept for payment the Shares validly tendered and not withdrawn, promptly after the consummation of the Offer, we expect to consummate a second-step merger pursuant to Section 251(h) of the DGCL with Spirit in which Spirit will become a wholly-owned subsidiary of JetBlue (in the Potential Merger, all Shares that were not purchased in the Offer will be exchanged for an amount in cash per Share equal to the Offer Price without interest and less any required withholding taxes). If the Potential Merger takes place, stockholders who did not validly tender Shares in the Offer (other than Shares held
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by JetBlue, the Purchaser, Spirit or their respective subsidiaries immediately prior to the effective time and Shares as to which dissenters’ rights have been properly perfected) will receive the same amount of cash per Share that they would have received had they validly tendered their Shares in the Offer. See “The Offer — Section 12 — Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger.”
The treatment of your Shares if the Potential Merger does take place and you properly perfect your appraisal rights is discussed in “The Offer — Section 15 — Certain Legal Matters; Regulatory Approvals; Appraisal Rights.”
If the conditions to consummation of the Offer have been satisfied and Shares are purchased, will Spirit continue as a public company?
No. We expect to complete the Potential Merger as soon as practicable following the consummation of the Offer. Once the Potential Merger takes place, Spirit will be a wholly-owned subsidiary of JetBlue. We intend to cause the Shares to be delisted from the NYSE and deregistered under the Exchange Act as soon after completion of the Potential Merger as the requirements for such delisting and termination of registration are satisfied. See “The Offer — Section 7 — Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing; Registration Under the Exchange Act; Margin Regulations.”
Do I have to vote to approve the Potential Merger?
No. JetBlue and the Purchaser intend to complete the Offer only if the Merger Agreement Condition is satisfied and a sufficient number of Shares are tendered such that the Minimum Tender Condition is satisfied, permitting JetBlue and the Purchaser to rely on Section 251(h) of the DGCL to complete the Potential Merger without the requirement of approval from the Spirit stockholders.
Are appraisal rights available in the Offer?
No appraisal rights will be available to you in connection with the Offer. However, if the Potential Merger is completed, stockholders of Spirit who do not tender their Shares in the Offer, continue to hold Shares at the time of completion of the Potential Merger, neither vote in favor of the Potential Merger nor consent thereto in writing and otherwise comply with the applicable statutory procedures under Section 262 of the DGCL will have the right to demand appraisal of their Shares. Under Section 262 of the DGCL, such stockholders will be entitled to receive a judicial determination of the fair value of their Shares, exclusive of any element of value arising from the accomplishment or expectation of the Potential Merger, and to receive payment of that fair value in cash, together with a fair rate of interest, if any. Any judicial determination of the fair value of Shares could be based upon factors other than, or in addition to, the price per share to be paid in the Potential Merger or the market value of the Shares. The value so determined could be more or less than the price per share to be paid in the Potential Merger. See “The Offer — Section 15 — Certain Legal Matters; Regulatory Approvals; Appraisal Rights.”
What is the market value of my Shares as of a recent date?
On April 4, 2022, the last trading day before the existence of our proposal to acquire all of the outstanding Shares for cash was publicly disclosed (see “The Offer — Section 11 — Background of the Offer; Other Transactions with Spirit”), the closing price of the Shares on the NYSE was $21.99 per Share. The Offer represents: (i) a premium of 36% over Spirit’s closing share price on April 4, 2022; and (ii) a premium of 38% over the undisturbed share price per Share on the trading day prior to the announcement of the Proposed Frontier Transaction.
Please obtain a recent quotation for your Shares prior to deciding whether or not to tender. See “The Offer — Section 6 — Price Range of Shares; Dividends.”
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What are the material U.S. federal income tax consequences of participating in the Offer?
The receipt of cash in exchange for Shares pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes if you are a U.S. Holder (as defined in “The Offer — Section 5 — Certain Material U.S. Federal Income Tax Consequences”). In general, you will recognize gain or loss equal to the difference between your adjusted tax basis in Shares that you tender into the Offer and the amount of cash you receive for such Shares. If you are a U.S. Holder and you hold your Shares as a capital asset, the gain or loss that you recognize will be a capital gain or loss and will be treated as a long-term capital gain or loss if you have held such Shares for more than one year. If you are a Non-U.S. Holder (as defined in “The Offer — Section 5 — Certain Material U.S. Federal Income Tax Consequences”), you will generally not be subject to U.S. federal income tax on gain recognized on Shares you tender into the Offer. See “The Offer — Section 5 — Certain Material U.S. Federal Income Tax Consequences” for a discussion of certain material U.S. federal income tax consequences of tendering Shares into the Offer.
We recommend that you consult your own tax advisor about the particular tax consequences to you of tendering your Shares in the Offer (including the application and effect of any state, local or non-U.S. income and other tax laws).
Who can I talk to if I have questions about the Offer?
You can call Innisfree, our information agent for the Offer, toll free at (877) 800-5190. See the back cover of this Offer to Purchase.
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To the Stockholders of Spirit Airlines, Inc.:
Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (together with its subsidiaries, “JetBlue,” “we,” “our” or “us”), is offering to purchase all of the outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), at $30.00 per Share, net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time, this “Offer to Purchase”) and the related letter of transmittal that accompanies this Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”).
Stockholders with Shares registered in their own names and who tender directly to Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), will not have to pay brokerage fees, commissions or similar expenses. Stockholders with Shares held in street name by a broker, dealer, bank, trust company or other nominee should consult with their nominee to determine whether such nominee will charge a fee for tendering Shares on their behalf. Except as set forth in Instruction 6 of the Letter of Transmittal, stockholders will not be obligated to pay transfer taxes on the sale of Shares pursuant to the Offer. We will pay all charges and expenses of the Depositary and Innisfree M&A Incorporated, our information agent for the Offer (the “Information Agent”), incurred in connection with their services in such capacities in connection with the Offer. See “The Offer — Section 17 — Fees and Expenses.”
Consummation of the Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn on or prior to the Expiration Date (as defined in this Offer to Purchase) a number of Shares which, together with any Shares then owned by JetBlue and its subsidiaries (including the Purchaser), represents at least a majority of the total number of Shares outstanding on a fully diluted basis (the “Minimum Tender Condition”); (ii) the Agreement and Plan of Merger, dated February 5, 2022 (as amended from time to time, the “Frontier Merger Agreement”), among Spirit, Top Gun Acquisition Corp., a Delaware corporation (“Frontier Merger Sub”), and Frontier Group Holdings, Inc., a Delaware corporation (“Frontier”), having been validly terminated in accordance with its terms (the “Termination Condition”); (iii) the Spirit stockholders having not adopted the Frontier Merger Agreement and not approved the transactions contemplated thereby (the “Vote Condition”); (iv) JetBlue, the Purchaser and Spirit having entered into a definitive merger agreement (in form and substance satisfactory to JetBlue in its reasonable discretion) with respect to the acquisition of Spirit by JetBlue providing for a second-step merger pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with Spirit surviving as a wholly-owned subsidiary of JetBlue, without the requirement for approval of any stockholder of Spirit, to be effected promptly following the consummation of the Offer, and such merger agreement having not been terminated and the conditions to effecting the Potential Merger (as defined below) pursuant to Section 251(h) of the DGCL being satisfied upon the acceptance for payment of Shares tendered pursuant to the Offer (the “Merger Agreement Condition”); (v) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and any customary timing agreement with any governmental entity to toll, stay, or extend any such waiting period, or to delay or not to consummate the Offer, having expired or been earlier terminated (the “HSR Condition”); (vi) all consents, registrations, notices, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders, and authorizations required to be obtained from, or delivered to, as applicable, the U.S. Federal Aviation Administration (the “FAA”), the U.S. Department of Transportation (the “DOT”), and the Federal Communications Commission (the “FCC”) in connection with the consummation of the Offer having been obtained or delivered, as applicable (the “FAA/DOT/FCC Condition”); (vii) all other authorizations, consents, orders, approvals, filings, declarations and expirations of waiting periods required under the antitrust or competition laws of any foreign jurisdictions applicable to the transactions contemplated by this Offer to Purchase having been obtained; (viii) there not having occurred any change, event, circumstance, development,
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condition, occurrence or effect that, in the reasonable judgment of JetBlue, has had, or would reasonably be expected to have, individually or in the aggregate, a Spirit Material Adverse Effect (as defined in this Offer to Purchase); (ix) Spirit or any of its subsidiaries or affiliates not being a party to any agreement or transaction having the effect of impairing, in the reasonable judgment of JetBlue, the Purchaser’s or JetBlue’s ability to acquire the Shares or Spirit or otherwise diminishing the expected value to JetBlue or its subsidiaries of the acquisition of Spirit (the “No Impairment Condition”); and (x) the Purchaser being satisfied, in its reasonable judgment, that it will not be subject to the restrictions of Section 203 of the DGCL (the “Section 203 Condition”). Other conditions to the Offer are described in the “The Offer — Section 14 — Conditions of the Offer.” Provided that all conditions of the Offer are satisfied or waived (if such condition is permitted to be waived pursuant to applicable law), the Purchaser will purchase all Shares validly tendered and not validly withdrawn on or prior to the Expiration Date.
Consummation of the Offer is not subject to any financing condition.
Based on the Spirit Definitive Proxy Statement, there are 108,618,703 Shares outstanding as of May 6, 2022. As of the date of this Offer to Purchase, we beneficially own 100 Shares, representing fewer than one percent of the total Shares on a fully diluted basis.
The purpose of the Offer is to acquire control of, and ultimately the entire equity interest in, Spirit. If the Minimum Tender Condition, the Merger Agreement Condition and the other conditions of the Offer are satisfied and the Offer is consummated, we intend to complete a second-step merger with Spirit in which Spirit will become a wholly-owned subsidiary of JetBlue pursuant to Section 251(h) of the DGCL promptly following consummation of the Offer, and all of the outstanding Shares that are not purchased in the Offer (other than Shares held by JetBlue, the Purchaser, Spirit or their respective subsidiaries immediately prior to the effective time and Shares as to which dissenters’ rights have been properly perfected) will be exchanged for an amount in cash per Share equal to the Offer Price, without interest, and less any required withholding taxes (as further described herein, the “Potential Merger”). See “The Offer — Section 12 — Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger.”
We are seeking to enter into a definitive agreement for the acquisition of Spirit by JetBlue, and are prepared to engage with Spirit immediately. We are making the Offer because the Spirit Board has refused to meaningfully engage with us with respect to our initial proposal to acquire all of the outstanding Shares for $33.00 per Share in cash, first made on March 29, 2022. Given this lack of engagement by the Spirit Board to date, our Offer Price of $30.00 per Share, in cash, without interest and less any required withholding taxes, is less than the price that we had offered to the Spirit Board on March 29, 2022. However, we believe the Offer is clearly superior to the proposed merger contemplated by the Frontier Merger Agreement, pursuant to which Frontier Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving corporation (the “Proposed Frontier Transaction”). Although, under the terms of the Frontier Merger Agreement the Spirit Board is permitted to engage in discussions with us since they determined our proposal could reasonably be expected to result in a Superior Proposal (as defined in the Frontier Merger Agreement), the Spirit Board has refused to meaningfully engage with JetBlue with respect to a negotiated transaction. Because we believe our proposal to acquire Spirit is clearly a Superior Proposal, we are making the Offer directly to Spirit stockholders on the terms and conditions set forth in this Offer to Purchase as an alternative to the Proposed Frontier Transaction.
Subject to applicable law, we reserve the right to amend the Offer in any respect (including amending the Offer Price). In addition, in the event that we enter into a merger agreement with Spirit and such merger agreement does not provide for a tender offer, we reserve the right to terminate the Offer, in which case the Shares would, upon consummation of such merger, be converted into the right to receive the consideration negotiated by us and Spirit and specified in such merger agreement.
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No appraisal rights are available in connection with the Offer except in connection with the completion of the Potential Merger. See “The Offer — Section 15 — Certain Legal Matters; Regulatory Approvals; Appraisal Rights.”
In the event the Offer is terminated or not consummated, or after the expiration of the Offer, we may purchase additional Shares not tendered in the Offer. Such purchases may be made in the open market or through privately negotiated transactions, tender offers or otherwise. Any such purchases may be on the same terms as, or on terms more or less favorable to Spirit stockholders than, the terms of the Offer. Any possible future purchases by us will depend on many factors, including the results of the Offer, our business and financial position and general economic and market conditions.
This Offer to Purchase and the Letter of Transmittal contain important information, and you should carefully read both in their entirety before you make a decision with respect to the Offer.
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| 1. | Terms of the Offer. |
Upon the terms and subject to the conditions of the Offer (including, if we extend or amend the Offer, the terms and conditions of any such extension or amendment), we will accept for payment and pay for all Shares validly tendered prior to the Expiration Date (as defined herein) and not previously validly withdrawn in accordance with “The Offer — Section 14 — Conditions of the Offer.” “Expiration Date” means 5:00 p.m., New York City time, on June 30, 2022, unless extended, in which event “Expiration Date” means the time and date at which the Offer, as so extended, shall expire.
The Offer is subject to the conditions set forth in “The Offer — Section 14 — Conditions of the Offer.” If any such condition is not satisfied, we may: (i) terminate the Offer and return all tendered Shares to tendering stockholders; (ii) extend the Offer and, subject to withdrawal rights as set forth in “The Offer — Section 4 — Withdrawal Rights,” retain all such Shares until the expiration of the Offer as so extended; (iii) to the extent permitted by applicable law, waive such condition and, subject to any requirement to extend the period of time during which the Offer is open, purchase all Shares validly tendered prior to the Expiration Date and not validly withdrawn; or (iv) delay acceptance of Shares for payment or payment for Shares, subject to applicable law, until satisfaction or waiver of the conditions to the Offer.
Subject to any applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), we expressly reserve the right, but not the obligation, in our sole discretion, at any time and from time to time, to extend the period during which the Offer is open for any reason by giving oral or written notice of the extension to the Depositary and by making a public announcement of the extension. During any extension, all Shares previously tendered and not validly withdrawn will remain subject to the Offer and subject to the right of a tendering stockholder to withdraw Shares.
If we decrease the percentage of Shares being sought or increase or decrease the consideration to be paid for Shares pursuant to the Offer and the Offer is scheduled to expire at any time before the expiration of a period of ten business days from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified below, the Offer shall be extended until the expiration of such ten business day period. If we make any other material change in the terms of or information concerning the Offer or waive a material condition of the Offer, we will extend the Offer, to the extent required by applicable law, for a period sufficient to allow you to consider the amended terms of the Offer. In a published release, the SEC has stated that, in its view, an offer must remain open for a minimum period of time following a material change in the terms of such offer. The release states that an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders, and that if material changes are made with respect to information that approaches the significance of price and number of shares tendered for, a minimum of ten business days may be required to allow adequate dissemination and investor response.
“business day” for the purposes of the Offer means any day, other than Saturday, Sunday or a U.S. federal holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time.
If we extend the Offer, are delayed in accepting Shares for payment or in paying for Shares or are unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may retain all Shares tendered on our behalf, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as provided in “The Offer — Section 4 — Withdrawal Rights.” Our reservation of the right to delay acceptance of Shares for payment or payment for Shares is subject to applicable law, which requires that we pay the consideration offered or return the Shares deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer.
Any extension, delay, termination, waiver or amendment of the Offer will be followed promptly by a public announcement thereof. In the case of an extension of the Offer, we will issue a press release announcing such
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extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.
We are making a request to Spirit for the use of its stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the Letter of Transmittal will be mailed to record holders of Shares whose names appear on Spirit’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list, or if applicable, who are listed as participants in a clearing agency’s security position listing.
| 2. | Acceptance for Payment and Payment for Shares. |
Upon the terms and subject to the conditions of the Offer (including, if we extend or amend the Offer, the terms and conditions of any such extension or amendment), we will accept for payment and pay for all Shares validly tendered before the Expiration Date and not validly withdrawn, promptly after the Expiration Date. We expressly reserve the right, in our sole discretion, but subject to applicable laws, to delay acceptance of Shares for payment and thereby delay payment for Shares in order to comply with applicable laws or if any of the conditions referred to in “The Offer — Section 14 — Conditions of the Offer” have not been satisfied or if any event specified in such Section has occurred. Subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we reserve the right, in our sole discretion and subject to applicable law, to delay the acceptance for payment or delay payment for Shares until satisfaction of all conditions to the Offer. For a description of our right not to accept for payment or pay for Shares or to delay acceptance of, or payment for, Shares, see “The Offer — Section 14 — Conditions of the Offer.”
We will pay for Shares accepted for payment pursuant to the Offer by depositing the purchase price with the Depositary, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of: (i) certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility (as defined in “The Offer — Section 3 — Procedure for Tendering Shares; Book-Entry Transfer”)); (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) or Agent’s Message (as defined in “The Offer — Section 3 — Procedures for Tendering Shares; Book-Entry Transfer”) in lieu of a Letter of Transmittal; and (iii) any other required documents. For a description of the procedure for tendering Shares pursuant to the Offer, see “The Offer — Section 3 — Procedure for Tendering Shares.” Accordingly, payment may be made to tendering stockholders at different times if delivery of the Shares and other required documents occurs at different times. Under no circumstances will we pay interest on the consideration paid for tendered Shares, regardless of any extension of or amendment to the Offer or any delay in making such payment.
For purposes of the Offer, we will be deemed to have accepted for payment tendered Shares when, as, and if we give oral or written notice of our acceptance to the Depositary.
We will pay the same per Share consideration pursuant to the Offer to all stockholders. The per Share consideration paid to any stockholder pursuant to the Offer will be the highest per Share consideration paid to any other stockholder pursuant to the Offer.
We reserve the right to transfer or assign, in whole or in part from time to time, to one or more of our affiliates the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve us of our obligations under the Offer or prejudice your rights to receive payment for Shares validly tendered and accepted for payment.
If any tendered Shares are not accepted for payment pursuant to the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased or untendered Shares will be
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returned (or in the case of Shares tendered by book-entry transfer, such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), without expense to you, promptly following the expiration or termination of the Offer.
| 3. | Procedure for Tendering Shares. |
Valid Tender of Shares
In order for you to validly tender Shares pursuant to the Offer, either: (i) the Depositary must receive at one of its addresses set forth on the back cover of this Offer to Purchase (a) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) or Agent’s Message (as defined herein) in lieu of a Letter of Transmittal and any other documents required by the Letter of Transmittal and (b) certificates for the Shares to be tendered or delivery of such Shares pursuant to the procedures for book-entry transfer described below (and a confirmation of such delivery including an Agent’s Message if the tendering stockholder has not delivered a Letter of Transmittal), in each case by the Expiration Date; or (ii) the guaranteed delivery procedure described below must be complied with.
The method of delivery of Shares, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility (as defined in “The Offer — Section 3 — Procedure for Tendering Shares; Book-Entry Transfer”), is at your sole option and risk, and your Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by book-entry confirmation). If certificates for Shares are sent by mail, we recommend registered mail with return receipt requested, properly insured, in time to be received on or prior to the Expiration Date. Stockholders wishing to deliver documents by hand should contact the Depositary to make arrangements for such delivery and comply with any COVID-19 protocols then in effect.
The valid tender of Shares pursuant to any one of the procedures described above will constitute your acceptance of the Offer, as well as your representation and warranty that: (i) you have the full power and authority to tender, sell, assign and transfer the Shares tendered, as specified in the Letter of Transmittal; and (ii) when the same are accepted for payment by the Purchaser, the Purchaser will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims.
Our acceptance for payment of Shares tendered by you pursuant to the Offer will constitute a binding agreement between us with respect to such Shares, upon the terms and subject to the conditions of the Offer.
Book-Entry Transfer
The Depositary will establish an account with respect to the Shares for purposes of the Offer at The Depository Trust Company (the “Book-Entry Transfer Facility”) after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility’s system may make book-entry transfer of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account in accordance with the Book-Entry Transfer Facility’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer, the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, together with any required signature guarantees or an Agent’s Message and any other required documents must, in any case, be transmitted to, and received by, the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase by the Expiration Date, or the guaranteed delivery procedure described below must be complied with. Delivery of the Letter of Transmittal and any other required documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.
The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a book-entry confirmation stating that the Book-Entry Transfer
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Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received, and agrees to be bound by, the terms of the Letter of Transmittal and that we may enforce such agreement against such participant.
Signature Guarantees
All signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 under the Exchange Act) (each an “Eligible Institution”), unless: (i) the Letter of Transmittal is signed by the registered holder of the Shares tendered therewith and such holder has not completed the box entitled “Special Payment Instructions” on the Letter of Transmittal; or (ii) such Shares are tendered for the account of an Eligible Institution. See Instructions 1, 5 and 7 of the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered holder of the certificates surrendered, the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as aforesaid. See Instructions 1, 5 and 7 of the Letter of Transmittal.
Guaranteed Delivery
If you wish to tender Shares pursuant to the Offer and cannot deliver such Shares and all other required documents to the Depositary by the Expiration Date or cannot complete the procedure for delivery by book-entry transfer on a timely basis, you may nevertheless tender such Shares if all of the following conditions are met:
| (i) | such tender is made by or through an Eligible Institution; |
| (ii) | a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by us is received by the Depositary, as provided below, by the Expiration Date; and |
| (iii) | the certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) together with any required signature guarantee or an Agent’s Message and any other required documents, are received by the Depositary within two New York Stock Exchange (“NYSE”) trading days after the date of execution of the Notice of Guaranteed Delivery. |
The Notice of Guaranteed Delivery may be delivered or transmitted by email or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery.
Backup Withholding
Under U.S. federal income tax laws, payments in connection with the Offer may be subject to “backup withholding” unless a tendering holder: (i) provides a correct taxpayer identification number (which, for an individual, is the holder’s social security number) and any other required information; or (ii) is a corporation or comes within certain other exempt categories, and when required, demonstrates this fact, and in each case, otherwise complies with applicable requirements of the backup withholding rules. A holder that does not provide a correct taxpayer identification number may be subject to penalties imposed by the Internal Revenue Service (the “IRS”). To avoid backup withholding of U.S. federal income tax on payments made pursuant to the Offer,
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each tendering U.S. Holder (as defined below) should complete and return the IRS Form W-9 included with the Letter of Transmittal. Each tendering Non-U.S. Holder (as defined below) should complete and submit IRS Form W-8BEN or W-8BEN-E (or other applicable IRS Form W-8), which can be obtained from the Depositary or at https://www.irs.gov. For a more detailed discussion of backup withholding, see Instruction 8 of the Letter of Transmittal and “The Offer — Section 5 — Certain Material U.S. Federal Income Tax Consequences.”
Appointment of Proxy
By executing a Letter of Transmittal (or a manually signed facsimile thereof), or in the case of a book-entry transfer, by delivery of an Agent’s Message in lieu of a Letter of Transmittal, you irrevocably appoint our designees as your attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of your rights with respect to the Shares tendered and accepted for payment by us (and any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of this Offer to Purchase). This power-of-attorney and proxy will be governed by and construed in accordance with the laws of the State of Delaware and applicable federal securities laws. All such powers-of-attorney and proxies are irrevocable and coupled with an interest in the tendered Shares (and such other Shares and securities). Such appointment is effective only upon our acceptance for payment of such Shares.
Upon such acceptance for payment, all prior powers-of-attorney, proxies and consents granted by you with respect to such Shares (and such other Shares and securities) will, without further action, be revoked, and no subsequent powers-of-attorney, proxies or consents may be given (and if previously given, will cease to be effective). Our designees will be empowered to exercise all your voting and other rights with respect to such Shares (and such other Shares and securities) as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of Spirit’s stockholders, or with respect to any actions by written consent in lieu of any such meeting or otherwise. We reserve the right to require that, in order for Shares to be deemed validly tendered, immediately upon our acceptance for payment of such Shares, we or our designee must be able to exercise full voting, consent and other rights with respect to such Shares (and such other Shares and securities) (including voting at any meeting of stockholders).
The foregoing proxies are effective only upon acceptance for payment of Shares pursuant to the Offer.
Neither this Offer to Purchase nor the Offer constitutes a solicitation of proxies for any meeting of stockholders of Spirit, including our solicitation of proxies to be used at a special meeting of Spirit stockholders on June 10, 2022 (the “Special Meeting”) in connection with the adoption of the Frontier Merger Agreement and the approval of the Proposed Frontier Transaction (the “Frontier Merger Proposal”) and any other matter to be considered at the Special Meeting. Any such solicitation has been or will be made only pursuant to separate proxy solicitation materials complying with the requirements of Section 14(a) of the Exchange Act.
Determination of Validity
All questions as to the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto), the form of documents and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by us, in our discretion. We reserve the absolute right to reject any and all tenders determined by us not to be in proper form or the acceptance of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any condition of the Offer to the extent permitted by applicable law or any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with the tenders must be cured within such time as the Purchaser shall determine. None of the Purchaser, JetBlue nor any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person will be under
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any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.
| 4. | Withdrawal Rights. |
A stockholder may withdraw Shares that it has previously tendered pursuant to the Offer pursuant to the procedures set forth below at any time before the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after July 15, 2022, which is the 60th day from the commencement of the Offer, unless such Shares have already been accepted for payment by the Purchaser pursuant to the Offer. If we extend the Offer, delay acceptance for payment or payment for Shares or are unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may, on our behalf, retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in this Section 4.
For your withdrawal to be effective, a written notice of withdrawal with respect to the Shares must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, and the notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of Shares, if different from that of the person who tendered such Shares. If the certificates evidencing Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with (except in the case of Shares tendered by an Eligible Institution) signatures guaranteed by an Eligible Institution must be submitted before the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn, or in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares.
Withdrawals may not be rescinded, and Shares validly withdrawn will thereafter be deemed not validly tendered. However, withdrawn Shares may be re-tendered by again following one of the procedures described in “The Offer — Section 3 — Procedure for Tendering Shares” at any time before the Expiration Date.
We will determine, in our discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal. We also reserve the absolute right to waive any defect or irregularity in the withdrawal of Shares by any stockholder, whether or not similar defects or irregularities are waived in the case of any stockholder. None of the Purchaser, JetBlue or any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or waiver of any such defect or irregularity or incur any liability for failure to give any such notification.
| 5. | Certain Material U.S. Federal Income Tax Consequences. |
The following is a summary of certain material U.S. federal income tax consequences to holders whose Shares are tendered and accepted for payment pursuant to the Offer. This summary is based on current provisions of the Internal Revenue Code of 1986, as amended, regulations thereunder and administrative and judicial interpretations thereof, all of which are subject to change, possibly with retroactive effect, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion. No ruling has been or will be sought from the IRS with respect to the matters discussed below, and there can be no assurance that the IRS will not take a contrary position regarding the tax consequences of the Offer or that any such contrary position would not be sustained by a court.
This summary is not a comprehensive description of all U.S. federal income tax considerations that may be relevant to the Offer. This discussion applies to holders who hold Shares as capital assets for U.S. federal income tax purposes, and may not apply to Shares received pursuant to the exercise of employee stock options or
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otherwise as compensation or to holders of Shares who are in special tax situations (including, without limitation, expatriates and certain former citizens of the United States, “controlled foreign corporations,” “passive foreign investment companies,” financial institutions, insurance companies, brokers, dealers or traders in securities, commodities or currencies, tax-exempt organizations, tax qualified retirement plans, or persons liable for the alternative minimum tax) or to persons holding Shares as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment or U.S. Holders whose functional currency is not the U.S. dollar. This discussion does not address any tax consequences arising under state, local or foreign tax laws or U.S. federal estate or gift tax laws.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships and partners in such partnerships should consult their tax advisors with regard to the U.S. federal income tax consequences of exchanging Shares pursuant to the Offer.
We recommend that you consult your own tax advisor about the particular tax consequences to you of tendering your Shares in the Offer (including the application and effect of any state, local or non-U.S. income and other tax laws).
U.S. Holders.
For purposes of this discussion, the term “U.S. Holder” means a beneficial owner of Shares that is, for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia; (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust if (1) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of the substantial decisions of the trust, or (2) it has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.
The receipt of cash by U.S. Holders in exchange for Shares pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes. In general, you will recognize a capital gain or loss in an amount equal to the difference between the amount of cash received and your adjusted basis in the Shares exchanged. Gain or loss will be determined separately for each block of Shares (that is, Shares acquired at the same price in a single transaction) exchanged. If you are a non-corporate U.S. Holder who has held the Shares for more than one (1) year, any such capital gain will generally be taxed at preferential rates. The deductibility of capital losses is subject to limitations.
A U.S. Holder of Shares that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax (the “Medicare tax”), is subject to a 3.8% tax on the lesser of: (i) the U.S. Holder’s “net investment income” (or “undistributed net investment income” in the case of an estate or trust) for the relevant taxable year; and (ii) the excess of the U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and $250,000, depending on the individual’s circumstances). A U.S. Holder’s net investment income generally includes its net gains recognized upon a sale of Shares pursuant to the Offer, unless such net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). A U.S. Holder of Shares that is an individual, estate or trust should consult its tax advisor regarding the applicability of the Medicare tax to gains in respect of the sale of Shares pursuant to the Offer.
Non-U.S. Holders
For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of Shares that is, for U.S. federal income tax purposes: (i) a nonresident alien individual; (ii) a foreign corporation; or (iii) an estate or
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trust that in either case is not subject to U.S. federal income tax on a net income basis on income or gain from the Shares.
In general, a Non-U.S. Holder who receives cash in exchange for Shares pursuant to the Offer will not be subject to U.S. federal income tax on any gain recognized, unless:
| • | the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States, and if required by an applicable income tax treaty as a condition for subjecting such holder to U.S. taxation on a net income basis, attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; |
| • | the Non-U.S. Holder is an individual present in the United States for 183 days or more during the taxable year of the exchange of Shares pursuant to the Offer, and certain other requirements are met; or |
| • | Spirit is or has been a United States real property holding corporation for U.S. federal income tax purposes and the Non-U.S. Holder held, directly or indirectly, at any time during the five-year period ending on the date of exchange, more than five percent (5%) of Shares and such holder is not eligible for any treaty exemption. |
“Effectively connected” gains that are recognized by a corporate Non-U.S. Holder may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or at a lower rate if such holder is eligible for the benefits of an income tax treaty that provides for a lower rate.
We have made no determination as to whether Spirit is or has been a United States real property holding corporation during the past five years for U.S. federal income tax purposes.
Information Reporting and Backup Withholding
Payments made pursuant to the Offer generally will be subject to information reporting and may be subject to backup withholding. To avoid backup withholding, each U.S. Holder that does not otherwise establish an exemption should complete and return the IRS Form W-9 included with the Letter of Transmittal, certifying that such U.S. Holder is a U.S. person, the taxpayer identification number provided is correct and such U.S. Holder is not subject to backup withholding. Certain holders (including corporations) generally are not subject to backup withholding. A Non-U.S. Holder generally will be exempt from information reporting and backup withholding if it provides the Depositary with a properly executed IRS Form W-8BEN or W-8BEN-E (or other applicable IRS Form W-8) certifying such Non-U.S. Holder’s non-U.S. status or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Holders may use amounts withheld as a credit against their U.S. federal income tax liability or may claim a refund of any excess amounts withheld by timely filing a claim for refund with the IRS. Certain penalties apply for failure to furnish correct information and for failure to include reportable payments in income. Each stockholder should consult with his or her own tax advisor as to his or her qualification for exemption from backup withholding and the procedure for obtaining such exemption.
FATCA
Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) impose a 30% withholding tax on the gross proceeds from a sale, exchange or other taxable disposition of stock of a U.S. issuer, except to the extent otherwise provided in Treasury regulations or other IRS guidance, if paid to “foreign financial institutions” and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements have been satisfied, or an exemption applies. The IRS released proposed Treasury regulations that, if finalized in their present form, would make such tax inapplicable to such gross proceeds. In its preamble to such proposed Treasury regulations, the IRS stated that taxpayers (including withholding agents) may rely on the proposed Treasury regulations until final Treasury regulations are issued. Non-U.S. Holders should consult their tax advisers regarding the possible implications of FATCA upon their receipt of cash in exchange for Shares pursuant to the Offer.
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| 6. | Price Range of Shares; Dividends. |
The Shares are listed and traded on the NYSE under the symbol “SAVE.” The following table sets forth, for each of the calendar quarters indicated, the high and low reported price for the Shares on the NYSE and the dividends paid on the Shares, in each case, as reported in publicly available sources.
| High | Low | |||||||
| Fiscal Year Ending December 31, 2020 |
||||||||
| First Quarter |
$ | 44.58 | $ | 8.39 | ||||
| Second Quarter |
$ | 25.56 | $ | 8.01 | ||||
| Third Quarter |
$ | 19.36 | $ | 15.37 | ||||
| Fourth Quarter |
$ | 27.03 | $ | 15.56 | ||||
| Fiscal Year Ending December 31, 2021 |
||||||||
| First Quarter |
$ | 39.74 | $ | 26.03 | ||||
| Second Quarter |
$ | 38.29 | $ | 30.44 | ||||
| Third Quarter |
$ | 31.29 | $ | 22.89 | ||||
| Fourth Quarter |
$ | 27.01 | $ | 20.04 | ||||
| Fiscal Year Ending December 31, 2022 |
||||||||
| First Quarter |
$ | 27.53 | $ | 18.59 | ||||
| Second Quarter (through May 13, 2022) |
$ | 26.92 | $ | 16.35 | ||||
If we acquire control of Spirit, we currently intend that no dividends will be declared on the Shares prior to acquisition by us of the remaining equity interest in Spirit.
On April 4, 2022, the last trading day before the existence of our proposal to acquire all of the outstanding Shares for cash was publicly disclosed (see “The Offer — Section 11 — Background of the Offer; Other Transactions with Spirit”), the closing price of the Shares on the NYSE was $21.99 per Share. The Offer represents: (i) a premium of 36% over Spirit’s closing share price on April 4, 2022; and (ii) a premium of 38% over the undisturbed share price per Share on the trading day prior to the announcement of the Proposed Frontier Transaction.
Please obtain a recent quotation for your Shares prior to deciding whether or not to tender.
| 7. | Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing; Registration Under the Exchange Act; Margin Regulations. |
Because the Potential Merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Potential Merger. Promptly after the consummation of the Offer, the Purchaser and Spirit will consummate the Potential Merger as soon as practicable pursuant to Section 251(h). Immediately following the Potential Merger, all of the outstanding Shares will be held by JetBlue.
Possible Effects of the Offer on the Market for the Shares
If the Offer is successful, there will be no market for the Shares because the Purchaser intends to consummate the Potential Merger as soon as practicable.
Stock Exchange Listing
The Shares are currently listed on the NYSE. Depending upon the number of the Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements for continued listing on the NYSE if, among other things, Spirit does not meet the requirements for the number of publicly held Shares, the aggregate market value of the publicly held Shares or the number of market makers for the Shares. JetBlue will seek to cause the listing of the Shares on the NYSE to be discontinued after the consummation of the Potential Merger as soon as the requirements for termination of the listing are satisfied.
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If the NYSE were to delist the Shares, it is possible that the Shares would continue to trade on other securities exchanges or in the over-the-counter market and that price or other quotations of the Shares would be reported by other sources. The extent of the public market for such Shares and the availability of such quotations would depend, however, upon such factors as the number of stockholders and the aggregate market value of such securities remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act and other factors.
Registration Under the Exchange Act
The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application by Spirit to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of the registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by Spirit to its stockholders and to the SEC and would make certain of the provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b), the requirement to furnish a proxy statement pursuant to Section 14(a) in connection with a stockholders’ meeting and the requirements of Rule 13e-3 under the Exchange Act with respect to “going private” transactions, no longer applicable to the Shares. Furthermore, “affiliates” of Spirit and persons holding “restricted securities” of Spirit may be deprived of, or delayed in, the ability to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended. We intend to seek to cause Spirit to terminate registration of the Shares under the Exchange Act as soon after consummation of the Offer as the requirements for termination of registration of the Shares are met.
Margin Regulations
The Shares are currently “margin securities” under the regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such Shares. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that the Shares might no longer constitute “margin securities” for the purposes of the Federal Reserve Board’s margin regulations, and therefore, could no longer be used as collateral for loans made by brokers.
| 8. | Certain Information Concerning Spirit. |
Except as otherwise expressly set forth in this Offer to Purchase, the information concerning Spirit contained in this Offer to Purchase has been taken from or based upon publicly available documents and records on file with the SEC and other public sources and is qualified in its entirety by reference thereto. None of JetBlue, the Purchaser or any of their respective affiliates or assigns, the Information Agent or the Depositary takes responsibility for the accuracy or completeness of the information contained in such documents and records or for any failure by Spirit to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to JetBlue, the Purchaser or any of their respective affiliates or assigns, the Information Agent or the Depositary. JetBlue, the Purchaser, the Information Agent and the Depositary have relied upon the accuracy of the information included in such publicly available documents and records and other public sources and have not made any independent attempt to verify the accuracy of such information.
According to the definitive proxy statement filed by Spirit with the SEC on May 11, 2022 (as may be amended from time to time thereafter, the “Spirit Definitive Proxy Statement”), Spirit was founded in 1964 as Clippert Trucking Company, a Michigan corporation. It began air charter operations in 1990 and renamed itself Spirit Airlines, Inc. in 1992. In 1994, Spirit reincorporated in Delaware, and in 1999 it relocated its headquarters to Miramar, Florida. Spirit’s principal executive office is located at 2800 Executive Way, Miramar, Florida 33025, and its telephone number is (954) 447-7920. According to the Spirit Definitive Proxy Statement, Spirit
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offers affordable travel to value-conscious customers, its all-Airbus fleet is one of the youngest and most fuel efficient in the United States, and Spirit serves 85 destinations in 16 countries throughout the United States, Latin America and the Caribbean.
Additional Information
Spirit is subject to the informational requirements of the Exchange Act, and in accordance therewith, files periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Spirit is required to disclose in such proxy statements certain information, as of particular dates, concerning Spirit’s directors and officers, their remuneration, stock options and other equity awards granted to them, the principal holders of Spirit’s securities and any material interest of such persons in transactions with Spirit. Such reports, proxy statements and other information may be read and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can also be obtained free of charge at the website maintained by the SEC at http://www.sec.gov.
| 9. | Certain Information Concerning JetBlue and the Purchaser. |
JetBlue
JetBlue is a Delaware corporation incorporated in 1998. The principal executive offices of JetBlue are located at 27-01 Queens Plaza North, Long Island City, New York 11101 (telephone number (718) 286-7900). JetBlue is a publicly-traded airline serving over 100 destinations across the United States, the Caribbean and Latin America, and between New York and London. JetBlue’s shares are traded on the NASDAQ Stock Market under trading symbol “JBLU.” JetBlue’s website is located at https://www.jetblue.com.
We offer our customers a distinctive flying experience which we refer to as the “JetBlue Experience.” We believe we deliver award-winning service that focuses on the entire customer experience, from booking an itinerary to arrival at the final destination. In 2021, we generated $6 billion in operating revenue. As of December 31, 2021, we had approximately 22,200 crewmembers.
We are a predominately point-to-point system carrier, with the majority of our routes touching at least one of our six focus cities: New York, Boston, Fort Lauderdale-Hollywood, Orlando, Los Angeles, and San Juan, Puerto Rico. All six of our focus cities are in regions with a diverse mix of traffic. Largely enabled by the Northeast Alliance with American Airlines Group Inc., we announced nine new “BlueCities” and 32 new routes in 2021. As of December 31, 2021, our network served 107 “BlueCities” in 31 states, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, 24 countries in the Caribbean and Latin America, and England, our first country in Europe.
The Purchaser
The Purchaser is a Delaware corporation formed for the purpose of making the Offer to acquire the Shares subject to the terms and conditions set forth herein, and to date, has engaged in no activities other than those incident to its formation and the commencement of the Offer. The Purchaser is a direct wholly-owned subsidiary of JetBlue. The principal executive offices of the Purchaser are located at 27-01 Queens Plaza North, Long Island City, New York 11101.
The name, business address, citizenship, present principal occupation and employment history for the past five years of each of the directors and executive officers of the Purchaser and JetBlue are set forth in Schedule I and Schedule II to this Offer to Purchase.
None of JetBlue, the Purchaser, or to the knowledge of JetBlue and the Purchaser after reasonable inquiry, any of the persons listed in Schedule I or Schedule II, has during the past five years been: (a) convicted in a criminal proceeding
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(excluding traffic violations or similar misdemeanors) or (b) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws or a finding of any violation of U.S. federal or state securities laws.
As of the date of this Offer to Purchase, JetBlue beneficially owns 100 Shares, representing fewer than one percent of the total Shares based on the Spirit Definitive Proxy Statement. Such Shares were acquired by JetBlue through ordinary brokerage transactions on the open market on May 2, 2022, at a purchase price of $21.33 per Share. As of the date of this Offer to Purchase: (i) Mr. B. Ben Baldanza, a member of the JetBlue board of directors and, from 2005 to 2016, Spirit’s Chief Executive Officer, beneficially owned 62,300 Shares; and (ii) Ms. Laurie Villa, JetBlue’s Chief People Officer and, from 2014 to 2021, Spirit’s Senior Vice President & Chief Human Resources Officer, beneficially owned 2,674 Shares (which Shares were acquired while employed by Spirit prior to being employed by JetBlue). The Shares beneficially owned by each of Mr. Baldanza and Ms. Villa total less than one percent of the total Shares outstanding as of the date of this Offer to Purchase.
Except as set forth in this Offer to Purchase or Schedule I or Schedule II to this Offer to Purchase: (i) none of JetBlue, the Purchaser, or to the knowledge of JetBlue and the Purchaser, any of the persons listed in Schedule I or Schedule II hereto, or any associate or majority owned subsidiary of JetBlue, the Purchaser or of any of the persons so listed, beneficially owns or has a right to acquire any Shares or any other equity securities of Spirit; (ii) except for the open market purchase of 100 Shares by JetBlue on May 2, 2022, for a purchase price of $21.33 per Share, none of JetBlue, the Purchaser, or to the knowledge of JetBlue and the Purchaser, the persons or entities referred to in clause (i) above, has effected any transaction in the Shares or any other equity securities of Spirit during the past 60 days; (iii) none of JetBlue, the Purchaser, or to the knowledge of JetBlue and the Purchaser, any of the persons listed in Schedule I or Schedule II hereto, has any agreement, arrangement or understanding with any other person with respect to any securities of Spirit (including, but not limited to, any agreement, arrangement or understanding concerning the transfer or voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations); (iv) during the two years before the date of this Offer to Purchase, there have been no transactions between JetBlue, the Purchaser, their subsidiaries, or to the knowledge of JetBlue, the Purchaser, or any of the persons listed in Schedule I or Schedule II to this Offer to Purchase, on the one hand, and Spirit or any of its affiliates, on the other hand, that have an aggregate value of transactions that is more than one percent of Spirit’s consolidated revenues for the fiscal year when such transaction occurred (if the transaction occurred in this fiscal year, the past portion of the current fiscal year); (v) during the two years before the date of this Offer to Purchase, there have been no transactions between JetBlue, the Purchaser, their subsidiaries, or to the knowledge of JetBlue and the Purchaser, any of the persons listed in Schedule I or Schedule II to this Offer to Purchase, on the one hand, and any of Spirit’s executive officers, directors or affiliates that is a natural person, on the other hand, that have an aggregate value exceeding $60,000; and (vi) during the two years before the date of this Offer to Purchase, there have been no material contacts, negotiations or transactions between JetBlue, the Purchaser, their subsidiaries, or to the knowledge of JetBlue and the Purchaser, any of the persons listed in Schedule I or Schedule II to this Offer to Purchase, on the one hand, and Spirit or any of its subsidiaries or affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets.
We do not believe that our financial condition is material to your decision whether to tender Shares and accept the Offer because the Offer is being made for all Shares solely for cash. The Offer is not subject to any financing condition; and as described in “The Offer — Section 10 — Source and Amount of Funds” below, the Purchaser, through JetBlue, will have sufficient funds available to purchase all Shares validly tendered into the Offer. The Bridge Facility (as defined in “The Offer — Section 10 — Source and Amount of Funds”) arranged for JetBlue in connection with the Offer provides for a “certain funds” commitment and does not contain any financial covenants that would prevent JetBlue from consummating the Offer.
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Available Information.
Pursuant to Rule 14d-3 under the Exchange Act, we have filed with the SEC a Tender Offer Statement on Schedule TO (the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The Schedule TO and the exhibits thereto, as well as other information filed by the Purchaser with the SEC, are available for inspection at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or (202) 551-7900 for further information on the public reference room. Copies of such information may be obtained by mail, upon payment of the SEC’s customary charges, by writing to the SEC at 100 F Street, N.E., Washington, D.C. 20549-0213. The SEC also maintains a website at http://www.sec.gov that contains the Schedule TO and the exhibits thereto and other information that the Purchaser has filed electronically with the SEC. Additionally, requests for copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and all other related materials may be directed to the Information Agent or brokers, dealers, commercial banks and trust companies and copies will be furnished promptly at the Purchaser’s expense.
| 10. | Source and Amount of Funds. |
The consummation of the Offer is not subject to any financing condition.
The total amount of funds required by the Purchaser to consummate the Offer and purchase all of the outstanding Shares in the Offer is approximately $3.38 billion, plus related fees and expenses. JetBlue will provide the Purchaser with sufficient funds to purchase all of the Shares validly tendered in the Offer. We expect to fund such amount with cash on hand and/or proceeds from future financings transactions, including term loans and/or offerings in the debt capital markets. In addition, the Initial Lenders have executed and delivered to us a commitment letter (the “Commitment Letter”), pursuant to which the Initial Lenders have committed to provide, subject to the terms and conditions of the Commitment Letter, the Bridge Facility for the purpose of funding the Offer and purchase of Shares if the financing transactions are not completed.
The Bridge Facility will have a 364-day maturity from the initial funding date, with no extension features. The applicable interest rate on the Bridge Facility is anticipated to be a forward looking term rate based on the secured overnight rate plus an initial interest margin of 300 basis points, increasing 50 basis points every 90 days thereafter. The definitive financing documentation will also include a base rate option.
Voluntary prepayments on the Bridge Facility will be permitted at any time without premium or penalty. The Bridge Facility will be subject to mandatory prepayments (without penalty or payment of a premium) with (1) net cash proceeds from certain non-ordinary course asset sales, casualty proceeds or other dispositions of Collateral (as defined in the Commitment Letter); (2) net cash proceeds from issuances of debt (other than certain permitted debt); and (3) net cash proceeds from equity issuances (other than certain permitted equity issuances).
The funding of the Bridge Facility is subject to the following conditions:
| • | execution and delivery of definitive financing documentation for the Bridge Facility; |
| • | subject to the limited conditionality provisions set forth in the Commitment Letter, execution and delivery of security and guarantee documents for the perfection of the collateral and the guarantees of the Bridge Facility; |
| • | delivery of customary closing certificates, good standing certificates, notice of borrowing and customary legal opinions (including a solvency certificate); |
| • | the material accuracy of certain specified representations to the extent required by the limited conditionality provisions set forth in the Commitment Letter (or if qualified by materiality or material adverse effect, the accuracy thereof); |
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| • | there not having occurred a Spirit Material Adverse Effect; |
| • | delivery of the certain financial statements and information, as detailed in the Commitment Letter; |
| • | the payment, or arrangement for such payment substantially contemporaneously with the initial funding of the Bridge Facility, of all fees and expenses required under the Commitment Letter; |
| • | receipt at least three business days prior to the funding date of all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act; |
| • | JetBlue having engaged one or more investment banks reasonably satisfactory to the Lead Arrangers (as defined in the Commitment Letter) to arrange, publicly sell or privately place any loan facilities, debt securities and/or enhanced equipment trust certificates to refinance or replace the Bridge Facility; |
| • | entry into a merger agreement providing for the closing of the Potential Merger promptly following consummation of the Offer pursuant to Section 251(h) of the DGCL, in form and substance reasonably satisfactory to the lead arrangers under the Commitment Letter; and |
| • | the conditions to the Offer having been satisfied. |
The obligation of the Initial Lenders to fund the Bridge Facility will terminate upon the earliest of: (i) the date which is fourteen months following the date of the Commitment Letter, subject to certain extension periods pending receipt of regulatory approvals as described in this Offer to Purchase; (ii) the date of any public announcement of the termination of this Offer or abandonment of the acquisition of Spirit; and (iii) the consummation of this Offer without the use of the Bridge Facility.
The foregoing summary of the Bridge Facility is qualified in its entirety by reference to the full text of the Commitment Letter entered into by GS and Bank of America, a copy of which will be filed as an Exhibit to the Schedule TO of which this Offer to Purchase forms a part.
Based upon the combination of cash on hand and proceeds from future financing transactions (or amounts available under the Bridge Facility if such financing transactions are not completed), we expect to have sufficient funds to pay the Offer Price for all Shares in the Offer.
We do not believe that our financial condition is material to your decision whether to tender Shares and accept the Offer because: (i) the Offer is being made for all of the outstanding Shares solely for cash; (ii) the Offer is not subject to any financing condition; and (iii) we believe we will have sufficient funds through available cash and the Commitment Letter, to purchase all Shares validly tendered in the Offer and not validly withdrawn and related fees and expenses.
| 11. | Background of the Offer; Other Transactions with Spirit. |
Background of the Offer
As part of their ongoing evaluation of JetBlue’s business and strategic alternatives, the board of directors of JetBlue (the “JetBlue Board”) and members of JetBlue leadership, on occasion with outside legal and financial advisors, have from time to time evaluated a range of strategic opportunities and prospects for acquisitions across the airline industry. In the course of JetBlue’s ongoing evaluation, and in connection with certain events described below, JetBlue leadership considered and reviewed a possible acquisition of Spirit.
On February 7, 2022, Spirit and Frontier issued a joint press release announcing they had entered into the Frontier Merger Agreement pursuant to which Frontier would acquire Spirit for (i) $2.13 in cash and (ii) 1.9126 shares of Frontier’s common stock, which implies a value of $18.81 per share based on Frontier’s closing stock price of $8.72 on May 13, 2022, the last trading day before the filing of this Offer to Purchase. Based on the Spirit Definitive Proxy Statement, the Spirit Board did not contact any other potential interested parties (including JetBlue) prior to approving the Proposed Frontier Transaction.
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Promptly following the announcement of the Proposed Frontier Transaction, the JetBlue Board and members of JetBlue leadership began regularly meeting with representatives of Goldman Sachs & Co. LLC (“Goldman Sachs”), its financial advisor, and Shearman & Sterling LLP (“Shearman & Sterling”), its outside legal counsel, to discuss the Proposed Frontier Transaction and the possibility of an acquisition of Spirit by JetBlue as well as other strategic alternatives and JetBlue’s standalone organic plan in the event JetBlue elected not to pursue an acquisition of Spirit.
On March 29, 2022, Robin Hayes, Chief Executive Officer of JetBlue, called Edward M. Christie III, President and Chief Executive Officer of Spirit, to inform him of JetBlue’s strong interest in acquiring Spirit at a price of $33.00 per share in cash and that, following the call, he would be sending H. McIntyre Gardner, Chairman of the Spirit Board, and Mr. Christie a letter outlining the additional terms of JetBlue’s proposal to acquire Spirit. Immediately following the call, Mr. Hayes sent Messrs. Gardner and Christie the following letter (the “March Proposal”).
H. McIntyre Gardner
Chairman of the Board
Edward M. Christie III
President and Chief Executive Officer
Spirit Airlines, Inc.
2800 Executive Way
Miramar, FL 33025
March 29, 2022
Dear Mr. Gardner and Mr. Christie:
On behalf of JetBlue Airways Corporation (“JetBlue”), I am pleased to submit our proposal (our “Proposal”) to acquire 100% of the outstanding common stock of Spirit Airlines, Inc. (“Spirit”) for $33 per share in cash. Our Proposal is structured to maximize value and execution certainty for Spirit and its stockholders, and we firmly believe it constitutes a “Superior Proposal” as defined in the Agreement and Plan of Merger, dated as of February 5, 2022 (the “Frontier Agreement”), among Top Gun Acquisition Corp., Frontier Group Holdings, Inc. (“Frontier”) and Spirit, and would result in a transaction that is more favorable to the Spirit stockholders from a financial point of view than the proposed transaction with Frontier, and is capable of being consummated in accordance with the terms described in this letter.
We have long admired Spirit’s brand strength, products, fleet, and management team. The combination of our two companies would create a leading player best positioned to serve our customers by offering increased flight schedules and more competitive fares.
While we have not yet been afforded the opportunity to conduct confidential due diligence on Spirit, we have spent considerable time and resources in connection with this potential transaction, analyzing publicly available information on Spirit and its business. We are highly confident in our ability to reach agreement on terms of a definitive agreement between JetBlue and Spirit and to consummate the transaction on an expedited basis.
Compelling Strategic Rationale
We strongly believe that now is the time to form the leading low-cost industry champion by combining our two businesses. A JetBlue / Spirit combination will be unmatched among its peers:
| • | Enhanced scale: positioning the combined JetBlue / Spirit for long-term viability as a strong competitor to the ‘Big Four’ carriers, translating into lower fares to customers. The combined |
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| company will be the fifth largest airline in the U.S., with 94.9 million available seat miles and 77 million passengers served each year and will be able to compete with the ‘Big Four’ airlines more effectively. The increase in scale will also allow the combined company to take delivery of 312 aircraft in order to deliver low fares across the country and expand its loyalty, frequent flyer and membership offerings. |
| • | Differentiated customer offering: providing a larger number of customers with award-winning service on an increased scale. JetBlue is a 13-time J.D. Power Award winner for customer satisfaction, and is eager to deploy its capabilities on a larger scale to benefit all Spirit customers; additionally, the combination will allow the delivery of a more reliable service through operational efficiencies. |
| • | Network optimization and route expansion: increased flight schedules offering more reliable travel options, driving stronger competition and lower fares in currently underserved markets. The combined company will display 627 routes, 135+ served cities, 1,700+ daily flights and 455 aircraft. |
| • | Increased relevance of the network: providing more flight options to customers. The combined company will have an increased presence in strategic cities such as Orlando, Chicago, Atlanta, Dallas, Las Vegas and Los Angeles; the meaningful presence will result in more competitive fares across the local markets. |
| • | Bolstering a strategic Focus City in Fort Lauderdale: including 171 flights per day, to rival the legacy hub in Miami, while maintaining low fares and superior services. |
| • | Attractive financial profile: underpinned by fleet commonality as the foundation for sustainable growth, the transaction will accelerate the growth of both companies, and provide increased financial flexibility. |
Unique Opportunity for Spirit Team Members
A true source of pride at JetBlue is the excellent relationship we enjoy with our Crewmembers and we look forward to onboarding the Spirit Team Members. Based on the companies’ fleet commonality, we expect that the Spirit Team Members will be instrumental in executing the integration following the transaction. A combined JetBlue / Spirit will deploy best practices across the enlarged business and we would look to select the best-in-class team regardless of historical affiliations.
Therefore, as part of our Proposal, subject to our confirmatory diligence review, we confirm we will offer to each Spirit Team Member not covered by a collective bargaining agreement who continues to be employed by the combined company, salary, cash bonus and benefits opportunity consistent with that included in the Frontier Agreement for 12 months following the closing of our transaction.
Additionally, we also confirm we will treat the equity and other awards and retention program for key Spirit Team Members and officers in the manner contemplated by the proposed transaction with Frontier.
Terms of JetBlue Proposal
Our Proposal offers Spirit stockholders $33 per share in cash, which is more favorable to Spirit’s stockholders from a financial point of view than the merger consideration payable pursuant to the Frontier Agreement. Our Proposal represents a premium of $10.61 per share or 47% to the Spirit closing share price as of March 29, 2022. Our Proposal maximizes value for Spirit stockholders and we expect they would welcome the opportunity to realize immediate and certain value at a price which is significantly higher than the value implied by the terms of Frontier’s proposed acquisition of Spirit.
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We are prepared to provide you with our limited comments to the Frontier Agreement, which will include only matters necessary to reflect the terms of our Proposal, including the change in the form of consideration and the structural differences between the proposed transaction with Frontier and our Proposal. We are not proposing to change the amount of the termination fee payable by Spirit in certain circumstances. Except for these changes, we are prepared to proceed with the transaction between JetBlue and Spirit on the same terms as included in the Frontier Agreement.
Our Board of Directors has unanimously approved our Proposal. Furthermore, as we are proposing an all-cash transaction, no JetBlue stockholder vote will be required for this transaction, and our Proposal does not contemplate any financing contingency. As outlined in further detail below, we are highly confident that our Proposal can be consummated on a timely basis.
Proposal Offers Superior Value for Spirit Stockholders
Our Proposal offers Spirit stockholders $33 in cash per common share and implies a total Equity Value for Spirit of $3.6 billion and an Enterprise Value of $7.3 billion.1 This represents:
| • | a 52%2 premium to Spirit’s closing share price as of February 4, 2022 (the last trading day prior to Spirit’s announcement of its proposed transaction with Frontier); |
| • | a 47%3 premium to Spirit’s closing share price as of March 29, 2022; |
| • | a 35%4 premium to the implied value of the proposed transaction with Frontier on March 29, 2022; and |
| • | adjusted enterprise value multiples of 7.9x¹ and 14.4x¹ of Spirit’s 2019A and 2022E EBITDAR, respectively. |
Our Proposal clearly provides superior value to the proposed transaction with Frontier, including value certainty for your stockholders given the all-cash consideration and immediate liquidity.
Proposal Reduces Regulatory Risk
We recognize that closing certainty is of paramount importance to the Spirit Board of Directors. In that regard, we have spent considerable time with our outside counsel, Shearman & Sterling LLP, to review the necessary approvals required by regulatory authorities. As a result of this work, we expect to be able to obtain the necessary regulatory clearances in roughly the same timeframe from entering into a definitive agreement as the proposed transaction with Frontier.
Our Proposal is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, as well as any consents, approvals, or clearances required by the DOT, FAA, and the FCC. As described above, we believe our proposal is procompetitive and will generate significant consumer benefits by expanding the availability of JetBlue’s product to more routes and customers. Historically, JetBlue’s entry on new routes triggers fare decreases from legacy airlines that are more significant than legacy fare decreases resulting from Spirit’s entry. We believe that JetBlue’s expedited expansion and the resulting fare effects, coupled with the continued expansion of a robust ULCC segment, will address any regulatory concerns.
| 1 | Assumes fully diluted shares outstanding of approximately 109.5 million (as of 31-Dec-2021 10-K); Adj. Net Debt: $3.7 bn, including operating leases; Adj. EBITDAR of $927mm for 2019A, and Consensus EBITDAR of $507mm for 2022E. |
| 2 | Represents premium over Spirit’s $21.73 closing share price on February 4, 2022. |
| 3 | Represents premium over Spirit’s $22.39 closing share price on March 29, 2022. |
| 4 | Represents premium over $24.37 implied value of Frontier Offer as of March 29, 2022. |
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Furthermore, given our conviction in securing the necessary regulatory approvals, we are confident that we will be able to agree to terms in the definitive agreement that give you comfort with respect to both the actions to be taken that are reasonably designed to address any antitrust concerns, as well as to agree to a customary reverse break-up fee that would become payable to Spirit in the unlikely event our transaction is not consummated for antitrust reasons. Both these terms represent a meaningful improvement compared to the terms contemplated by the Frontier Agreement.
JetBlue’s legal counsel, Shearman & Sterling LLP, is ready to engage with your antitrust counsel immediately to review the basis for our regulatory assessment and our proposed approach to obtaining the necessary regulatory approvals.
Proposal Has No Financing Risk
Our Proposal does not contemplate any financing contingency. JetBlue intends to fund the transaction through a mix of available cash on hand as well as new debt financing. JetBlue has approximately $2.8 billion of cash on hand as of December 31, 2021 and a variety of unencumbered assets available, including our loyalty program, aircraft, spare engines, slots, gates and route collateral as well as our brand, worth in aggregate approximately $9.2 billion. Our proposed sources and uses for the transaction are included as Appendix 1.
We have also attached to this letter as Appendix 2 a Highly Confident Letter from Goldman Sachs, indicating their willingness to underwrite $3.5 billion in new debt to help finance the purchase price. We will obtain fully underwritten, binding commitment letters for any debt financing prior to signing a definitive agreement with Spirit.
Due Diligence and Next Steps
We are willing to move expeditiously to finalize our Proposal. We have dedicated a full team to the evaluation of Spirit and have devoted substantial resources to exploring a transaction with Spirit, including conducting a thorough review of Spirit’s business and operations based on publicly available information. We expect that the finalization of definitive documentation and confirmatory due diligence will be completed expeditiously and simply through access to the same information and materials provided to Frontier.
This transaction is of significant interest to JetBlue, and we are prepared to commit all the resources necessary to acquire Spirit.
Advisors
JetBlue has retained Goldman Sachs & Co. LLC as its financial advisor for this transaction and Shearman & Sterling LLP as its legal counsel. Our advisors are ready, willing and able to coordinate with Spirit’s advisors on the content of our Proposal and next steps.
Other
Our Proposal is submitted on the understanding that, except as and to the extent required by law or the terms of the Frontier Agreement, all information contained herein or related to the contents of this letter, including the terms of our Proposal, are confidential, and should not be disclosed to anyone other than Spirit’s officers and directors, and its legal and financial advisors, who need to know the information to evaluate our Proposal, in each case on a strictly confidential basis. This letter is not intended to be and, except with respect to the confidential nature of our Proposal, is not a binding contract between us or an offer by us capable of acceptance, and there will be no legally binding contract or agreement between JetBlue and Spirit regarding a transaction unless and until a definitive agreement is executed and delivered.
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Summary
Our Proposal represents a compelling opportunity for your stockholders to receive a significant premium in cash for their investment in Spirit, with greater value than the proposed transaction with Frontier. We firmly believe that our Proposal represents a “Superior Proposal” (as defined in the Frontier Agreement), and we believe strongly that our Proposal is in the best interests of your stockholders and that they will benefit from your cooperation with us to allow your stockholders to realize the benefits of our Proposal. We and our advisors are ready to engage with you immediately to reach agreement on the terms of our transaction as soon as possible.
We look forward to working together with you to achieve the optimal outcome for your stockholders, customers and Team Members, and are ready and available to discuss at your earliest convenience.
Sincerely,
/s/ Robin Hayes
Chief Executive Officer
On March 30, 2022, Mr. Peter Boneparth, the Chairman of the JetBlue Board, contacted Mr. Gardner to discuss the March Proposal and reiterate JetBlue’s desire to acquire Spirit; Mr. Gardner did not respond to Mr. Boneparth.
On the same day, representatives of Goldman Sachs contacted representatives of Morgan Stanley & Co. LLC (“Morgan Stanley”) and Barclays Bank PLC (“Barclays”), Spirit’s financial advisors, to discuss the March Proposal, each of whom declined to discuss it.
On April 5, 2022, following The New York Times publishing an article that JetBlue had submitted an offer to acquire Spirit, JetBlue issued a press release announcing that JetBlue had submitted to the Spirit Board the March Proposal, which proposal JetBlue believed constituted a Superior Proposal (as defined in the Frontier Merger Agreement).
Later that evening, Spirit issued a press release acknowledging receipt of the March Proposal and announcing that the Spirit Board would work with its financial and legal advisors to evaluate the March Proposal.
On April 6, 2022, JetBlue made available on its website materials for investors and analysts and held a conference call for investors and analysts during which certain members of JetBlue leadership discussed the March Proposal and answered questions from investors and analysts.
On April 7, 2022, Spirit issued a press release announcing that the Spirit Board had determined that the March Proposal could reasonably be likely to lead to a Superior Proposal, and that Spirit intended to engage in discussions with JetBlue, in accordance with the terms of the Frontier Merger Agreement.
Following Spirit’s press release, JetBlue issued a press release announcing that it welcomed the determination by the Spirit Board that the March Proposal could reasonably be likely to lead to a Superior Proposal under the terms of the Frontier Merger Agreement.
Later that same day, representatives of Spirit’s outside legal counsel, Debevoise & Plimpton LLP (“Debevoise”), provided representatives of Shearman & Sterling with a draft confidentiality agreement. In addition, representatives of Morgan Stanley and Barclays contacted representatives of Goldman Sachs to communicate that, although the Spirit Board had determined that the March Proposal could reasonably be likely to lead to a Superior Proposal, presently (i) the Spirit Board and its representatives did not believe JetBlue’s $33.00 per share offer was financially superior to the Proposed Frontier Transaction and (ii) the Spirit Board needed to understand JetBlue’s regulatory assessment of a potential combination of JetBlue and Spirit.
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On April 8, 2022, JetBlue and Spirit entered into a confidentiality agreement.
On April 9, 2022, Mr. Christie contacted Mr. Hayes to discuss the determination made by the Spirit Board that the March Proposal could reasonably be likely to lead to a Superior Proposal and that Spirit would facilitate due diligence by JetBlue while the parties discussed JetBlue’s regulatory assessment of the potential combination.
On April 9, 2022, representatives of Goldman Sachs discussed with representatives of Morgan Stanley and Barclays the plan for Spirit to share due diligence information with JetBlue and its representatives in parallel with the regulatory assessment of the potential combination of JetBlue and Spirit. Later that day, representatives of Goldman Sachs sent a preliminary due diligence request list to representatives of Spirit’s financial advisors, Morgan Stanley and Barclays, which included JetBlue’s high priority due diligence requests.
Also on April 9, 2022, Spirit’s General Counsel, a representative of Spirit’s outside antitrust counsel, Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul Weiss”), JetBlue’s General Counsel, and a representative of Shearman & Sterling held a telephone call to discuss a high level overview of JetBlue’s regulatory assessment of a potential combination of JetBlue and Spirit.
Over the next ten days, representatives of JetBlue, Spirit, Paul Weiss, Shearman & Sterling and the economic consultants of JetBlue and Spirit engaged in additional discussions regarding the regulatory assessment of a potential combination of JetBlue and Spirit. During this period, JetBlue continued to request additional, customary due diligence materials.
On April 13, 2022, representatives of Goldman Sachs contacted representatives of Morgan Stanley and Barclays to arrange a due diligence call with members of Spirit management to be held on April 19, 2022.
On April 15, 2022, Spirit provided JetBlue and its representatives with access to a virtual data room, which contained extremely limited business and legal due diligence materials and initially did not address any of JetBlue’s high priority due diligence requests.
On April 16 and 17, 2022, representatives of Goldman Sachs contacted representatives of Barclays to communicate JetBlue’s frustration with the limited due diligence materials in the virtual data room despite earlier indications by Mr. Christie that diligence would be conducted in parallel with the ongoing regulatory assessment, in particular in light of the fact that Spirit and its representatives continued to maintain that they did not believe JetBlue’s $33.00 per share offer was financially superior to the Proposed Frontier Transaction.
On April 19, 2022, members of JetBlue leadership and Spirit’s senior management team, along with representatives from Goldman Sachs, Morgan Stanley and Barclays, held a conference call to discuss various financial due diligence items, including Spirit’s five-year plan, Spirit’s revenue and cost drivers, and Spirit’s order book growth and aircraft financing strategy. During the meeting, JetBlue and Spirit discussed Spirit’s financial projections underpinning the transaction with Frontier included in the information statement and proxy statement/prospectus filed on Form S-4 by Frontier with the SEC on March 11, 2022 (as amended on April 15, 2022), focusing on Spirit’s unrealistic assumptions, especially with respect to costs associated with personnel attrition and wage inflation, which did not contemplate any wage increases for team members, including pilots, at a time of high attrition and an anticipated shortage of pilots.
Between April 19 and 20, 2022, representatives of Paul Weiss and representatives of Shearman & Sterling exchanged drafts of a clean team agreement. During this time, representatives of JetBlue, Spirit, Shearman & Sterling and Paul Weiss discussed certain regulatory commitments JetBlue was willing to provide in the transaction, which far exceeded those provided by Frontier, and representatives of Shearman & Sterling reiterated to representatives of Paul Weiss JetBlue’s desire to receive the requested due diligence materials beyond the extremely limited information in the virtual data room, particularly in light of the fact that JetBlue had provided representatives of Spirit extensive information responsive to the questions raised by representatives of Spirit as part of its regulatory assessment of the proposed transaction.
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On April 25, 2022, Mr. Hayes and Mr. Christie spoke by telephone regarding Spirit’s proposal for the size of the “reverse break-up fee” payable by JetBlue and the standard of efforts JetBlue would be required to undertake to obtain the required regulatory approvals for the acquisition by JetBlue of Spirit.
Later that day, representatives of Debevoise provided representatives of Shearman & Sterling a list of minimum regulatory requirements Spirit would require from JetBlue in order to proceed with further discussions (the “Spirit Regulatory Demands”), together with a proposed regulatory covenant to be included in any eventual definitive merger agreement between JetBlue and Spirit. Spirit’s demands included an unqualified “hell or high water” antitrust covenant requiring JetBlue to take any and all actions necessary to obtain any required antitrust and regulatory clearances (including, if required, an agreement to terminate JetBlue’s Northeast Alliance upon closing of the Spirit and JetBlue transaction), as well as a “reverse break-up fee” of not less than 12.5% of Spirit’s equity value at the agreed deal price. Each of these terms are unprecedented in airline industry transactions.
On April 29, 2022, Mr. Hayes called Mr. Christie to inform Mr. Christie that he would be sending an updated proposal that included enhanced deal terms not specified in the March Proposal and a draft merger agreement, which was substantially similar to the Frontier Merger Agreement other than modifications necessary to accommodate JetBlue’s all-cash proposal and the other terms and conditions set forth in the updated proposal. Following the telephone call, Mr. Hayes sent the following letter (the “Enhanced Proposal” and together with the March Proposal, the “JetBlue Proposal”) to Mr. Christie:
H. McIntyre Gardner
Chairman of the Board
Edward M. Christie III
President and Chief Executive Officer
Spirit Airlines, Inc.
2800 Executive Way
Miramar, FL 33025
April 29, 2022
Dear Mr. Gardner and Mr. Christie:
On behalf of JetBlue Airways Corporation (“JetBlue”), we are pleased to submit an update to our proposal dated March 29, 2022 (such proposal, our “March Proposal,” and together with this letter, our “Proposal”) to acquire all of the outstanding common stock of Spirit Airlines, Inc. (“Spirit”) for $33 per share in cash.
Acquiring Spirit has been a strategic objective of JetBlue for many years and, as such, we were disappointed that the Spirit Board of Directors (the “Spirit Board”) elected not to have any discussions with us prior to the announcement of Sprit’s transaction with Frontier Group Holdings, Inc. (“Frontier”). This lack of engagement regrettably resulted in Spirit entering into a transaction with Frontier that clearly does not maximize value for Spirit’s stockholders.
Following the determination of the Spirit Board on April 7, 2022 that our March Proposal could reasonably be likely to lead to a Superior Proposal,5 we have been ready, willing and able to work diligently with your team to complete a negotiated transaction. That said, while we appreciate the limited information received to date and time spent by your management team, we have been disappointed by the lack of progress made
| 5 | As defined in the Agreement and Plan of Merger, dated as of February 5, 2022 (the “Frontier Agreement”), among Top Gun Acquisition Corp., Frontier and Spirit. |
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since submitting our March Proposal, including the fact that you have not facilitated the finalization of a customary clean team agreement, a precursor to completing the limited diligence necessary to deliver to you and your stockholders a finalized “Superior Proposal” for you to accept. By not receiving access to the basic diligence information that was provided to Frontier, and that we requested in order to finalize a proposed transaction, we firmly believe your stockholders are being disadvantaged.
Our legal counsel has spent considerable time discussing with your counsel the outcome of our regulatory analysis and the basis of our conviction in our ability to complete the proposed transaction, summarized below. Despite these discussions, on April 25, 2022, you communicated to us what you described as contractual precursors relating to the regulatory components of our proposal to your willingness to share the diligence information we have requested. Your demands, including a “hell or high water” antitrust commitment, which is unprecedented in airline transactions, and a reverse break-up fee that exceeds almost all precedent transactions, are off-market and contrast starkly to the limited regulatory commitments made by Frontier, a transaction with a similar regulatory profile.
Nonetheless, to be responsive to your expressed concerns regarding JetBlue’s ability to consummate a transaction, we are enclosing a merger agreement (our “Proposed Merger Agreement”) that includes our proposed regulatory efforts covenant, the amount of the reverse break-up fee and those other matters necessary to reflect the terms of our Proposal. The regulatory commitments in our Proposed Merger Agreement represent a significant improvement from those offered by Frontier and demonstrate both our confidence in our ability to obtain the required regulatory approvals, as well as our commitment to deliver substantial value to your stockholders.
We firmly believe these additional terms, as described below, further improve our Proposal, enhancing its already clear superiority to the transaction with Frontier, and provide the Spirit Board with the necessary comfort around the certainty of closing our proposed transaction.
Our Proposal offers Spirit stockholders both superior financial value and greater certainty than the Frontier transaction — we therefore fully expect the Spirit Board to allow us to complete our due diligence, finalize the definitive transaction documentation and conclude that our Proposal is a Superior Proposal. Any different outcome would be puzzling and would deprive your stockholders of the most attractive value creating opportunity available to them. It is inconceivable to us that the Spirit Board would conclude that the Frontier transaction with no regulatory commitments would have greater odds of regulatory approval than our Proposal, given our meaningful regulatory commitment and reverse break-up fee, or that Spirit’s stockholders would prefer the ~$22 per share value6 of the Frontier transaction to our Proposal of $33 per share in cash.
Proposed Merger Agreement with Strong Regulatory Commitments
As our legal counsel and our economists have shared with your advisors over the last few weeks, for the reasons discussed below, we are highly confident that we will obtain the necessary regulatory clearances in approximately the same timeframe from entering into a definitive agreement as the proposed transaction with Frontier. We expect the Spirit Board will take this information into account when assessing our Proposal.
More generally, we disagree with any assessment that our Proposal presents significantly more regulatory risk than the Frontier transaction. To the contrary, a combined JetBlue-Spirit will create a more compelling and viable competitor to the big four carriers that control more than 80% of the U.S. market. Additionally, JetBlue’s entry into new routes triggers fare decreases from legacy airlines that are more significant than
| 6 | Implied value of Frontier transaction of $22.44, based on Frontier’s $10.62 closing share price as of April 28, 2022 and terms of the Frontier Agreement. |
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those resulting from ultra-low-cost carriers; this phenomenon has been described as the “JetBlue Effect”. Our recent economic analysis shows JetBlue’s presence on a nonstop route decreases legacy fares by ~16%, about three times as much as the presence of an ultra-low-cost carrier on the same route. We believe that JetBlue’s expedited expansion and the resulting net fare decreases, coupled with the demonstrated ease of other ultralow-cost carriers’ continued expansion and the divestitures we are prepared to undertake, will address any regulatory concerns that the Spirit Board, the regulators, and the courts may have.
In addition:
| • | Both transactions would create the number 5 airline carrier; a combined JetBlue and Spirit would have a 9% market share based on full year 2022 seats compared to 8% for a combined Frontier and Spirit; |
| • | JetBlue overlaps with Spirit only on 48 nonstop routes compared to Spirit and Frontier’s overlap on 76 nonstop routes7; and |
| • | JetBlue has also less overlap in flights, seats, and ASMs than Frontier in the metropolitan areas served by both.8 |
To be responsive, however, to the Spirit Board’s concerns regarding closing certainty, in addition to the superior cash price, our Proposed Merger Agreement includes regulatory commitments consistent with precedent airline transactions that are fundamentally more favorable for Sprit stockholders than those contained in the Frontier Agreement. Importantly, as more fully described in our Proposed Merger Agreement, JetBlue is prepared to agree to the following terms:
| • | Regulatory Covenant: we are willing to commit to use our reasonable best efforts to obtain regulatory approval, with an express obligation to litigate and to divest assets of JetBlue and Spirit up to a material adverse effect on Spirit, with a limited carve-out to this divestiture obligation for actions that would represent a “Burdensome Condition” under JetBlue’s Northeast Alliance; and |
| • | Reverse Break-Up Fee: a $200 million reverse break-up fee, representing approximately ~$1.80 per Spirit share, that would become payable to Spirit in the unlikely event our transaction is not consummated for antitrust reasons. This amount represents approximately 8% of Spirit’s share price on February 4, 2022, before the announcement of the Frontier transaction, and approximately 45% of the original premium paid by Frontier. |
Both these concessions are far superior compared to those contemplated by the Frontier Agreement, as:
| • | Frontier is not required to undertake any divestitures to obtain the necessary regulatory approvals to close its transaction, despite having greater overlap with Spirit on non-stop routes than JetBlue does, among other regulatory hurdles; and |
| • | Frontier is not required to pay a reverse break-up fee if the transaction is not consummated for antitrust reasons. |
In addition to these contractual commitments more favorable than those offered by Frontier, in order to address the concerns identified by your counsel, we will proactively offer to the DOJ a remedy package that contemplates the divestiture of all Spirit assets located in New York and Boston so, as a result of the transaction, we do not increase our presence in the airports covered by our Northeast Alliance, as well as gates and related assets at other airports, including Fort Lauderdale.
| 7 | Based on Q1-Q3 2021 DOT data. |
| 8 | Based on full-year data for both 2019 and 2021 based on scheduled flights/seats/ASMs. |
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The absence both of meaningful remedial obligations and a reverse break-up fee in the Frontier Agreement mean that despite obvious hurdles for its own transaction, Frontier, at its own option, could simply decline to make any regulatory concessions and abandon the transaction at no cost (or compensation to Spirit or its stockholders). In stark contrast to the transaction with Frontier, our Proposed Merger Agreement offers Spirit and its stockholders a clear path to completion based on its merits, critical commitments to consummate our proposed transaction according to its terms, and in the unlikely event it is not, financial compensation for Spirit. We firmly believe that it is in the best interest of your stockholders for you to accept our Proposal, which has significantly greater odds of achieving regulatory clearance given the stronger regulatory commitment on our part compared to Frontier.
Updated Proposal Continues to Represent Superior Value for Spirit Stockholders
Let me also remind you of the superior value that our Proposal offers Spirit stockholders: $33 in cash per common share, which implies a total Equity Value for Spirit of $3.6 billion and an Enterprise Value of $7.3 billion.9 This represents:
| • | a 52%10 premium to Spirit’s closing share price as of February 4, 2022 (the last trading day prior to Spirit’s announcement of its proposed transaction with Frontier); |
| • | a 50%11 premium to Spirit’s closing share price as of April 4, 2022 (the last trading day before our March Proposal being publicly disclosed); and |
| • | a 47%12 premium to the implied value of the proposed transaction with Frontier on April 28, 2022. |
Our Proposal clearly provides superior economic value to the transaction with Frontier, including value certainty and immediate liquidity for your stockholders given the all-cash consideration, and avoids the inherent uncertainty in the Frontier stock-for-stock transaction. The value of Frontier’s stock is subject to significant risks related to the realization of meaningful synergies, complex integration plans, retention of key employees, as well as an industry-wide challenging operating environment and market conditions. The market clearly appreciates these risks, with the value of the Frontier stock declining from $12.39 on February 4, 2022 to $10.62 on April 28, 2022 (a decrease of 14.3%, underperforming the airline index which increased by 4.8%13 over the same period).
The value of the Frontier transaction has declined from $25.83 to $22.44 over the same period, resulting in approximately $370 million of value erosion for the Spirit stockholders. Additionally, having had the opportunity to review the Spirit financial projections underpinning the transaction with Frontier, we believe those projections to be based on unrealistically optimistic assumptions, including, in particular, with respect to personnel attrition and wage inflation. The market more broadly shares our skepticism in the Spirit projections:
| • | Frontier’s and Spirit’s management forecasts for their combined EBITDAR for 2022 and 2023 are higher than analysts’ consensus estimates by approximately 25%; |
| • | Since Spirit’s projections were made public in the joint proxy statement/registration statement for the transaction, no analyst increased its forecasts for EBITDAR and the Frontier stock price declined 3.5% on the day, demonstrating how investors are giving little credit to the companies’ forecasts; and |
| 9 | Assumes fully diluted shares outstanding of approximately 109.5 million per Spirit’s Management; Adj. Net Debt: $3.7 bn, including operating leases; Adj. EBITDAR of $927mm for 2019A. |
| 10 | Represents premium over Spirit’s $21.73 closing share price on February 4, 2022. |
| 11 | Represents premium over Spirit’s $21.99 closing share price on April 4, 2022. |
| 12 | Represents premium over $22.44 implied value of Frontier transaction as of April 28, 2022. |
| 13 | Represents performance of US GLOBAL JETS INDEX between February 4 and April 28, 2022. |
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| • | The average target price from analysts covering Frontier has declined by approximately 18% since the announcement of the transaction with Spirit. |
The market has no confidence in those projections, gives little credit to future synergies, and significantly discounts the future value creation of the Frontier transaction. We firmly believe that Spirit stockholders would be in a far superior position receiving our riskless, substantial cash premium.
Compelling Strategic Rationale and Unique Opportunity for Spirit Team Members
Despite our questions regarding the projected financial information we have seen, we remain committed to the strong strategic rationale of combining our two businesses: enhanced scale, differentiated customer offering, route expansion, increased relevance of the network, creation of a new strategic hub in Fort Lauderdale and more financial flexibility will allow the combined company to compete with “Big Four” carriers more effectively.
Additionally, the transaction will better position the combined company to tackle the challenges specific to the current environment, such as aircraft and pilot shortages, and elevated cost inflation, which can be mitigated with increased scale. A larger and more flexible network will also enable more reliable and less volatile operations.
We also look forward to onboarding the Spirit Team Members. We expect they will be instrumental in executing the integration following the transaction. A combined JetBlue / Spirit will deploy best practices across the enlarged business, and we would look to select the best-in-class team.
Summary and Next Steps
Our Proposal represents a compelling opportunity for your stockholders to receive a significant premium in cash, with greater value and certainty than the proposed transaction with Frontier. The additional terms of our Proposal, as reflected herein and in the Proposed Merger Agreement, further widen the gap and unequivocally provide superior value and certainty to Spirit stockholders, making our Proposal definitively a Superior Proposal. We strongly believe that accepting our Proposal is in the best interests of your stockholders, and we urge you to consider it in order for them to realize the substantial benefits of our transaction. Any further delay in allowing us access to the limited information we need to complete our diligence will deprive your stockholders of the opportunity to benefit from a transaction that is clearly superior to your current transaction.
We are willing to move swiftly to finalize our proposed transaction and we hope that we can continue to work together to achieve the optimal outcome for your stockholders, customers and Team Members. We expect that the finalization of definitive documentation and confirmatory due diligence, alongside obtaining committed financing, will be completed expeditiously through access to the limited information we originally requested, which we have attached to this letter. We and our advisors remain ready and available to discuss and promptly finalize the terms of our clearly superior proposal.
Given the opportunity to benefit from the significant cash premium and immediate liquidity, we are confident that the Spirit stockholders will embrace our Proposal, as evidenced by the Spirit stock price reaction upon the disclosure of our Proposal on April 5. While we would unquestionably prefer to negotiate a transaction with you, if you continue to refuse to constructively engage with us so that we can deliver this value to your stockholders, we are actively considering all other options available to us.
Other
All information contained herein or related to the contents of this letter, including the terms of our Proposal, are subject to the terms of the Confidentiality Agreement, dated as of April 8, 2022, by and
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between Spirit and JetBlue. This letter is not intended to be and is not a binding contract between us or an offer by us capable of acceptance, and there will be no legally binding contract or agreement between JetBlue and Spirit regarding a transaction unless and until a definitive agreement is executed and delivered.
Sincerely,
/s/ Robin Hayes
Chief Executive Officer
Later the same day, representatives of Morgan Stanley and Barclays and representatives of Goldman Sachs held a conference call to discuss the Enhanced Proposal and the Spirit Regulatory Demands. During this call, representatives of Morgan Stanley and Barclays maintained that the JetBlue Enhanced Proposal did not meet the Spirit Regulatory Demands but did not object to the characterization by representatives of Goldman Sachs that the Enhanced Proposal was financially superior to the transaction with Frontier.
There was no contact between the two companies after the call among representatives of Goldman Sachs, Morgan Stanley and Barclays. In light of the previous lack of constructive engagement, the nature of the unprecedented demands from the Spirit Board, and the lack of outreach following submission of the Enhanced Proposal, in order to ensure that Spirit’s stockholders were aware of the terms of JetBlue’s superior proposal, which offered both greater and more certain value and a stronger commitment to obtain the required regulatory approvals than the Proposed Frontier Transaction, JetBlue issued a press release on the morning of May 2, 2022 announcing JetBlue had submitted the Enhanced Proposal to the Spirit Board.
Also, on the morning of May 2, 2022, Mr. Christie called Mr. Hayes to inform him that the Spirit Board had determined that the JetBlue Proposal did not constitute a Superior Proposal. Later that morning, Spirit issued a press release announcing that the Spirit Board had determined that JetBlue Proposal did not constitute a Superior Proposal.
On May 16, 2022, JetBlue issued a press release announcing that it was commencing the Offer. Shortly thereafter, JetBlue filed with the SEC a Schedule TO containing this Offer to Purchase, the Letter of Transmittal and related documents, and JetBlue expects to file on May 16, 2022 the required notification and report form under the HSR Act to begin antitrust review of the proposed combination with Spirit.
Also on May 16, 2022, JetBlue filed a preliminary proxy statement on Schedule 14A with the SEC to be used to solicit proxies in opposition to the Frontier Merger Proposal and other related proposals at the Special Meeting.
Confidentiality Agreement
On April 8, 2022, JetBlue and Spirit entered into a letter agreement (the “Confidentiality Agreement”). Under the terms of the Confidentiality Agreement, JetBlue and Spirit agreed that, subject to certain exceptions, neither of the parties nor their representatives would, for a one-year period from the date of the Confidentiality Agreement, disclose any of the other party’s Evaluation Material (as defined in the Confidentiality Agreement) or use any of the other party’s Evaluation Material except for the purpose of evaluating, negotiating or consummating a possible transaction between the parties.
This summary of the Confidentiality Agreement is only a summary and is qualified in its entirety by reference to the Confidentiality Agreement, which is filed as Exhibit (d) of the Schedule TO and is incorporated herein by reference.
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Other Transactions with Spirit
Except as described elsewhere herein, there is no present or proposed material agreement, arrangement, understanding or relationship between JetBlue, the Purchaser, or any of their executive officers, directors, controlling persons or subsidiaries, on the one hand, and Spirit or any of its executive officers, directors, controlling persons or subsidiaries, on the other hand.
| 12. | Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger. |
Purpose of the Offer and the Potential Merger; Plans for Spirit
The purpose of the Offer is for JetBlue, through the Purchaser, to acquire control of, and ultimately the entire equity interest in, Spirit. The Offer, as the first step in the acquisition of Spirit, is intended to facilitate the acquisition of all Shares. The purpose of the Potential Merger is to acquire all of the Shares not tendered and purchased pursuant to the Offer. If the Minimum Tender Condition, the Merger Agreement Condition and the other conditions of the Offer are satisfied and the Offer is consummated, the Potential Merger may be effected promptly following consummation of the Offer pursuant to Section 251(h) of the DGCL without the affirmative vote of the Spirit stockholders. See “— Statutory Requirements; Approval of the Potential Merger” below.
We are seeking to enter into a definitive agreement for the acquisition of Spirit by JetBlue, and are prepared to engage with Spirit immediately. We are making the Offer because the Spirit Board has refused to meaningfully engage with us with respect to our initial proposal to acquire all of the outstanding Shares for $33.00 per Share in cash, first made on March 29, 2022. Given this lack of engagement by the Spirit Board to date, our Offer Price of $30.00 per Share, in cash, without interest and less any required withholding taxes, is less than the price that we had offered to the Spirit Board on March 29, 2022. However, we believe the Offer is clearly superior to the Proposed Frontier Transaction. Although, under the terms of the Frontier Merger Agreement the Spirit Board is permitted to engage in discussions with us since they determined our proposal could reasonably be expected to result in a Superior Proposal (as defined in the Frontier Merger Agreement), the Spirit Board has refused to meaningfully engage with JetBlue with respect to a negotiated transaction. Because we believe our proposal to acquire Spirit is clearly a Superior Proposal, we are making the Offer directly to Spirit stockholders on the terms and conditions set forth in this Offer to Purchase as an alternative to the Proposed Frontier Transaction.
Subject to applicable law, we reserve the right to amend the Offer in any respect (including amending the Offer Price). In addition, in the event that we enter into a merger agreement with Spirit and such merger agreement does not provide for a tender offer, we reserve the right to terminate the Offer, in which case the Shares would, upon consummation of such merger, be converted into the consideration negotiated by us and Spirit and specified in such merger agreement.
In connection with the Offer, we have reviewed, and will continue to review, various possible business strategies that we might consider in the event that we acquire control of Spirit. In addition, if and to the extent that we acquire control of Spirit or otherwise obtain access to the books and records of Spirit, we intend to conduct a detailed review, subject to applicable law, of Spirit and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel and consider and determine what, if any, changes would be desirable to achieve anticipated synergies in the combined company, in light of the circumstances which then exist.
Except as described above or elsewhere in this Offer to Purchase (including the Potential Merger), the Purchaser has no present plans or proposals that would relate to or result in an extraordinary corporate transaction involving Spirit or any of its subsidiaries (such as a merger, reorganization, liquidation, or sale or other transfer of a material amount of assets), any change in the number or the term of the directors of or the filling of any existing vacancies on the Spirit Board, any change in the material terms of the employment contracts of the executive officers, any material change in Spirit’s indebtedness, capitalization or dividend rate or policy or any other material change in Spirit’s corporate structure or business.
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Statutory Requirements; Approval of the Potential Merger.
Section 251(h) of the DGCL provides that, following the consummation of a tender offer, approval by the stockholders of the target corporation will not be required to authorize the subsequent merger if certain requirements are met, including that: (i) the merger agreement must expressly permit or require that the merger will be effected pursuant to Section 251(h); (ii) the purchaser must tender for all of the outstanding shares; (iii) following the consummation of the tender, the purchaser must own the requisite number of shares to approve a merger if a meeting of stockholders had to be called; (iv) the purchaser must merge with and into the target corporation pursuant to the merger agreement; and (v) the outstanding shares of stock of the target corporation that are the subject of the Offer and not irrevocably accepted for payment in the Offer must be converted into the same amount and kind of consideration that was paid for shares of stock of the target corporation in the tender offer. The Merger Agreement Condition requires that any definitive merger agreement executed in respect of the Potential Merger expressly state that the Potential Merger is governed by Section 251(h). The Purchaser intends to effect the Potential Merger without prior notice to, or any action by, any stockholder of Spirit promptly following the consummation of the Offer.
If the Section 203 Condition is not satisfied but we elect, in our sole discretion, to consummate the Offer, Section 203 of the DGCL could delay our ability to acquire the entire equity interest in Spirit. In general, Section 203 prevents an “interested stockholder” (generally, a stockholder owning 15% or more of a corporation’s outstanding voting stock or an affiliate or associate thereof) from engaging in a “business combination” with a Delaware corporation for a period of three years following the time at which such stockholder became an interested stockholder unless: (i) prior to such time the corporation’s board of directors approved either the business combination or the transaction which resulted in such stockholder becoming an interested stockholder; (ii) upon consummation of the transaction which resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the corporation’s voting stock outstanding at the time the transaction commenced (excluding shares owned by certain employee stock plans and persons who are directors and also officers of the corporation); or (iii) at or subsequent to such time the business combination is approved by the corporation’s board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662⁄3% of the outstanding voting stock not owned by the interested stockholder.
We reserve the right to waive the Section 203 Condition, although there can be no assurance that we will do so, and we have not determined whether we would be willing to do so under any circumstances. If we waive such condition and purchase Shares pursuant to the Offer or otherwise and Section 203 is applicable, we may nevertheless seek to complete the Potential Merger or another business combination with Spirit as described above. However, if we purchase Shares pursuant to the Offer or otherwise and are prevented by Section 203 from completing the Potential Merger or another business combination with Spirit for any period of time without complying with Section 203, we may: (i) determine not to seek to complete the Potential Merger or another business combination; (ii) seek to acquire additional Shares in the open market, pursuant to privately negotiated transactions or otherwise, at prices that may be higher, lower or the same as the price paid in the Offer; or (iii) seek to effect one or more alternative transactions with or by Spirit. We have not determined whether we would take any of the actions described above under such circumstances.
The exact timing and details of any merger or other business combination involving Spirit will necessarily depend upon a variety of factors, including whether the Frontier Merger Agreement will be terminated in accordance with its terms, if and when Spirit enters into a definitive merger agreement with us and the number of Shares we acquire pursuant to the Offer, and if and when any necessary approvals or waiting periods under the laws of the U.S. or any foreign jurisdiction applicable to the purchase of Shares pursuant to the Offer or a subsequent business combination expire or are terminated or obtained, as applicable, without any actions or proceedings having been threatened or commenced by any federal, state or foreign government, governmental authority or agency seeking to challenge the Offer or such business combination on antitrust grounds or otherwise, as described herein. Although we currently intend to complete the Potential Merger, it is possible that,
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as a result of substantial delays in our ability to effect such a transaction, actions that Spirit may take in response to the Offer, information we obtain hereafter, changes in general economic or market conditions or in the business of Spirit or other currently unforeseen factors, such a transaction may not be so proposed, may be delayed or abandoned, or may be proposed on different terms. We reserve the right not to complete a merger or other business combination with Spirit or to propose such a transaction on terms other than those described above. Specifically, we reserve the right to (i) propose consideration in a merger or other business combination consisting of securities or a combination of cash and securities and (ii) propose consideration in such a transaction having a value that is greater than or less than the amount referred to above.
The foregoing discussion is not a complete statement of the DGCL and is qualified in its entirety by reference to the DGCL.
| 13. | Dividends and Distributions. |
If, on or after the date of this Offer to Purchase, Spirit: (i) splits, combines or otherwise changes the Shares or its capitalization; (ii) acquires Shares or otherwise causes a reduction in the number of Shares; (iii) issues, distributes to stockholders or sells additional Shares, or any shares of any other class of capital stock, other voting securities or any securities convertible into or exchangeable for, or rights, warrants or options, conditional or otherwise, to acquire, any of the foregoing; or (iv) discloses that it has taken such action, then, without prejudice to our rights under “The Offer — Section 14 — Conditions of the Offer,” we may make such adjustments in the Offer Price and other terms of the Offer and the Potential Merger as we deem appropriate to reflect such split, distribution, combination or other change, including the number or type of securities offered to be purchased.
If, on or after the date of this Offer to Purchase, Spirit declares or pays any cash dividend on the Shares or other distribution on the Shares, including, without limitation, any distribution of shares of any class or any other securities or warrants or rights, or issues with respect to the Shares any additional Shares, shares of any other class of capital stock, payable or distributable to stockholders of record on a date prior to the transfer of the Shares purchased pursuant to the Offer to us or our nominee or transferee on Spirit’s stock transfer records, then, subject to the provisions of “The Offer — Section 14 — Conditions of the Offer,” (i) the Offer Price may be reduced by the amount of any such cash dividends or cash distributions and (ii) the whole of any such non-cash dividend, distribution or issuance to be received by the tendering stockholders will: (a) be received and held by the tendering stockholders for our account and will be required to be promptly remitted and transferred by each tendering stockholder to the Depositary for our account, accompanied by appropriate documentation of transfer; or (b) at our direction, be exercised for our benefit, in which case the proceeds of such exercise will promptly be remitted to us. Pending such remittance and subject to applicable law, we will be entitled to all rights and privileges as owner of any such non-cash dividend, distribution, issuance or proceeds and may withhold the entire offer price or deduct from the offer price the amount or value thereof, as determined by us in our sole discretion.
In the event that we make any change in the Offer Price or other terms of the Offer, including the number or type of securities offered to be purchased, we will inform Spirit’s stockholders of this development and extend the expiration date of the Offer, in each case to the extent required by applicable law.
| 14. | Conditions of the Offer. |
Notwithstanding any other provision of the Offer, we are not required to accept for payment, or subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser’s obligation to pay for or return tendered Shares promptly after termination or expiration of the Offer), pay for any Shares, and may terminate or amend the Offer, if: (a) before the Expiration Date, the Minimum Tender Condition, the Termination Condition, the Vote Condition, the Merger Agreement Condition, the HSR Condition, the FAA/DOT/FCC Condition, the No Impairment Condition, or the Section 203 Condition shall not
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have been satisfied; (b) all other authorizations, consents, orders, approvals, filings, declarations and expirations of waiting periods required under the antitrust or competition laws of any foreign jurisdictions applicable to the transactions contemplated by this Offer to Purchase shall have not been obtained; or (c) at any time prior to the expiration of the Offer, any of the following conditions shall have occurred or exist:
| (i) | there is threatened, instituted or pending any claim, action or proceeding by any government, governmental authority or agency or any other person, whether domestic, state, federal, foreign or supranational, before any court or governmental authority or agency, whether domestic, state, federal, foreign or supranational: (a) challenging or seeking to, or which is reasonably likely to, make illegal, delay or otherwise, directly or indirectly, restrain or prohibit the making of the Offer, the acceptance for payment of or payment for some or all of the Shares by us or any of our affiliates or the completion by us or any of our affiliates of the Potential Merger or any other business combination involving Spirit; (b) seeking to obtain material damages in connection with, or otherwise directly or indirectly relating to, the transactions contemplated by the Offer, the Potential Merger or any other business combination involving Spirit; (c) seeking to restrain or prohibit the exercise of our full rights of ownership or operation by us or any of our affiliates of all or any portion of our business or assets or those of Spirit or any of its subsidiaries or affiliates or to compel us or any of our affiliates to dispose of or hold separate all or any portion of our business or assets or those of Spirit or any of its subsidiaries or affiliates or seeking to impose any limitation on our or any of our affiliates’ ability to conduct such businesses or own such assets; (d) seeking to impose or confirm limitations on our ability or that of any of our affiliates effectively to acquire, retain and exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired or owned by us or any of our affiliates on all matters properly presented to Spirit’s stockholders; (e) seeking to require divestiture or sale by us or any of our affiliates of any Shares; (f) seeking relief that if granted will result in a material diminution in the benefits expected, in our reasonable judgment, to be derived by us or any of our affiliates as a result of the transactions contemplated by the Offer, the Potential Merger or any other business combination involving Spirit; or (g) that otherwise, in our reasonable judgment, has or may have material adverse significance with respect to either the value of Spirit or any of its subsidiaries or affiliates or the value of the Shares to us or any of our affiliates; |
| (ii) | any action is taken, or any statute, rule, regulation, interpretation, judgment, injunction, order or decree is proposed, enacted, enforced, promulgated, amended, issued or deemed applicable to us or any of our affiliates, the Offer, the acceptance for payment of or payment for Shares, or the Potential Merger or any other business combination involving Spirit, by any court, government or governmental authority or agency, whether domestic, state, federal, foreign or supranational (other than the application of mandatory waiting period provisions under the HSR Act or any applicable foreign antitrust, competition or merger control law to the Offer, the Potential Merger or any other business combination involving Spirit) that, in our reasonable judgment, does or might, directly or indirectly, result in any of the outcomes or consequences referred to in clauses (a) through (g) of paragraph (i) above; |
| (iii) | since January 1, 2021, there has occurred, is occurring or is threatened to occur any change, event, circumstance, development, condition, occurrence or effect that, in our reasonable judgment, has had, or would reasonably be expected to have, individually or in the aggregate, a Spirit Material Adverse Effect (as defined below); |
| (iv) | there occurs: (a) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market; (b) any decline in either the Dow Jones Industrial Average, the Standard and Poor’s Index of 500 Industrial Companies or the NASDAQ-100 Index by an amount in excess of 10%, measured from the close of business on May 13, 2022; (c) any change in the general, political, market, economic or financial conditions in the United States, Europe or elsewhere that, in our reasonable judgment, could have a material adverse effect on the business, assets, liabilities, financial condition, capitalization, operations, results of operations or prospects of Spirit and its subsidiaries, taken as a whole, or JetBlue and its subsidiaries, taken as a whole; (d) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United |
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| States, Europe, Germany or other jurisdictions in which we or Spirit have substantial businesses; (e) any material adverse change (or development or threatened development involving a prospective material adverse change) in U.S. dollar or Euro currency exchange rates or the markets therefor (including any suspension of, or limitation on, such markets); (f) the commencement (or material worsening after the date of the Offer) of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States or Europe or any attack on or outbreak or act of terrorism involving the United States or Europe; (g) any limitation (whether or not mandatory) by any governmental authority or agency on, or any other event or change that, in our reasonable judgment, may adversely affect, the extension of credit by banks or other financial institutions or the availability of financing; or (h) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; |
| (v) | (a) a tender or exchange offer for some or all of the Shares has been publicly proposed to be made or has been made by another person (including Spirit or any of its subsidiaries or affiliates), or has been publicly disclosed, or we otherwise learn that any other person or “group” (as defined in Section 13(d)(3) of the Exchange Act) has acquired or proposes to acquire beneficial ownership of more than 5% of any class or series of capital stock of Spirit (including the Shares), through the acquisition of stock, the formation of a group or otherwise, or is granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of more than 5% of any class or series of capital stock of Spirit (including the Shares) other than acquisitions for bona fide arbitrage purposes only and other than as disclosed in a Schedule 13D or 13G on file with the SEC on the date of this Offer to Purchase; (b) any such person or group which, prior to the date of this Offer to Purchase, had filed such a schedule with the SEC has acquired or proposes to acquire beneficial ownership of additional shares of any class or series of capital stock of Spirit (including the Shares), through the acquisition of stock, the formation of a group or otherwise, constituting one percent or more of any such class or series, or is granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of additional shares of any class or series of capital stock of Spirit (including the Shares) constituting one percent or more of any such class or series; (c) any person or group has entered into a definitive agreement or an agreement in principle or made a proposal with respect to a tender or exchange offer or a merger, consolidation or other business combination with or involving Spirit, other than by Frontier pursuant to the Frontier Merger Agreement; or (d) any person has filed a Notification and Report Form under the HSR Act or made a public announcement reflecting an intent to acquire Spirit or any assets or securities of Spirit, other than by Frontier pursuant to the Frontier Merger Agreement; |
| (vi) | Spirit or any of its subsidiaries has: (a) split, combined or otherwise changed, or authorized or proposed the split, combination or other change of, the Shares or its capitalization; (b) acquired or otherwise caused a reduction in the number of, or authorized or proposed the acquisition or other reduction in the number of, Shares or other securities; (c) issued or sold, or authorized or proposed the issuance or sale of, any additional Shares, shares of any other class or series of capital stock, other voting securities or any securities convertible into, or options, rights or warrants, conditional or otherwise, to acquire, any of the foregoing (other than the issuance of Shares pursuant to and in accordance with the publicly disclosed terms in effect on the date of commencement of the Offer of employee stock options outstanding prior to such date), or any other securities or rights in respect of, in lieu of, or in substitution or exchange for any shares of its capital stock; (d) permitted the issuance or sale of any shares of any class of capital stock or other securities of any subsidiary of Spirit; (e) declared, paid or proposed to declare or pay any dividend or other distribution on any shares of capital stock of Spirit, including without limitation any distribution of shares of any class or any other securities or warrants or rights; (f) altered or proposed to alter any material term of any outstanding security or issued or sold, or authorized or proposed the issuance or sale of, any debt securities or otherwise incurred or authorized or proposed the incurrence of any debt other than in the ordinary course of business; (g) authorized, recommended, proposed or announced its intent to enter into or entered into an agreement with respect to or effected any merger, consolidation, liquidation, dissolution, business |
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| combination, acquisition of assets, disposition of assets or relinquishment of any material contract or other right of Spirit or any of its subsidiaries or any comparable event not in the ordinary course of business (other than the Frontier Merger Agreement); (h) authorized, recommended, proposed or announced its intent to enter into or entered into any agreement or arrangement with any person or group that, in our reasonable judgment, has or may have material adverse significance with respect to either the value of Spirit or any of its subsidiaries or affiliates or the value of the Shares to us or any of our affiliates (other than the Frontier Merger Agreement); (i) adopted, entered into or amended any employment, severance, change of control, retention or other similar agreement, arrangement or plan with or for the benefit of any of its officers, directors, employees or consultants or made grants or awards thereunder, in each case other than as publicly disclosed prior to the date of this Offer to Purchase, or adopted, entered into or amended any such agreements, arrangements or plans so as to provide for increased benefits to officers, directors, employees or consultants as a result of or in connection with the making of the Offer, the acceptance for payment of or payment for some of or all the Shares by us or our completion of the Potential Merger or any other business combination involving Spirit (including, in each case, in combination with any other event such as termination of employment or service); (j) except as may be required by law, taken any action to terminate or amend or materially increase liability under any employee benefit plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974) of Spirit or any of its subsidiaries, or we shall have become aware of any such action which was not previously announced; (k) transferred into escrow (or other similar arrangement) any amounts required to fund any existing benefit, employment, severance, change of control or other similar agreement, in each case other than in the ordinary course of business; or (l) amended, or authorized or proposed any amendment to, its certificate of incorporation or bylaws (or other similar constituent documents) or we become aware that Spirit or any of its subsidiaries shall have amended, or authorized or proposed any amendment to, its certificate of incorporation or bylaws (or other similar constituent documents) which has not been previously disclosed; |
| (vii) | (a) any material contractual right of Spirit or any of its subsidiaries has been or will be impaired or otherwise adversely affected or that any material amount of indebtedness of Spirit or any of its subsidiaries has been accelerated or has otherwise become due or become subject to acceleration prior to its stated due date, in each case, with or without notice or the lapse of time or both, as a result of or in connection with the Offer or the completion by us or any of our affiliates of the Potential Merger or any other business combination involving Spirit; or (b) any covenant, term or condition in any instrument or agreement of Spirit or any of its subsidiaries that, in our reasonable judgment, has or may have material adverse significance with respect to either the value of Spirit or any of its subsidiaries or affiliates or the value of the Shares to us or any of our affiliates (including, without limitation, any event of default that may ensue as a result of or in connection with the Offer, the acceptance for payment of or payment for some or all of the Shares by us or our completion of the Potential Merger or any other similar business combination involving Spirit); |
| (viii) | we or any of our affiliates and Spirit reach any agreement or understanding pursuant to which it is agreed that the Offer will be terminated; |
| (ix) | Spirit or any of its subsidiaries shall have: (a) granted to any person proposing a merger or other business combination with or involving Spirit or any of its subsidiaries or the purchase of securities or assets of Spirit or any of its subsidiaries any type of option, warrant or right which, in our reasonable judgment, constitutes a “lock-up” device (including, without limitation, a right to acquire or receive any Shares or other securities, assets or business of Spirit or any of its subsidiaries); or (b) paid or agreed to pay any cash or other consideration to any party in connection with or in any way related to any such business combination or purchase, in each case other than pursuant to the Proposed Frontier Transaction; or |
| (x) | any required approval, permit, authorization, extension, action or non-action, waiver or consent of any governmental authority or agency (including the other matters described or referred to in “The Offer — |
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| Section 15 — Certain Legal Matters; Regulatory Approvals; Appraisal Rights”) shall not have been obtained on terms reasonably satisfactory to JetBlue and the Purchaser or any waiting period or extension thereof imposed by any government or governmental authority or agency with respect to the Offer shall not have expired. |
“Spirit Material Adverse Effect” means any change, event, circumstance, development, condition, occurrence or effect that: (a) has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, financial condition, assets, liabilities or results of operations of Spirit and its subsidiaries, taken as a whole; or (b) prevents, or materially delays, the ability of Spirit to consummate the Offer; provided, however, that none of the following will be deemed in themselves, either alone or in combination, to constitute, and that none of the following will be taken into account in determining whether there has been or will be, a Spirit Material Adverse Effect: (i) any development in general economic conditions, or in securities, credit or financial markets, including changes in interest rates and changes in exchange rates, in the United States or any other country or region in the world in which Spirit conducts business or any industry-wide development generally affecting airline companies; (ii) any change in generally accepted accounting principles as applied in the United States, or any change in applicable laws applicable to the operation of the business of Spirit; (iii) any change resulting from the announcement or pendency of the Offer; (iv) acts of war, outbreak or escalation after the date of this Offer to Purchase of hostilities, terrorism or sabotage, or other changes in geopolitical conditions, earthquakes, hurricanes, tsunamis, tornados, floods, mudslides, wild fires or other natural disasters, any epidemic, pandemic, outbreak of illness or other public health event (including, for the avoidance of doubt, COVID-19 and impact of COVID-19 on Spirit) and other similar events in the United States or any other country or region in the world in which Spirit conducts business; (v) any failure by Spirit to meet any internal or published (including analyst) projections, expectations, forecasts or predictions in respect of Spirit’s revenue, earnings or other financial performance or results of operations (it being understood that the underlying facts and circumstances giving rise to such event may be deemed to constitute, and may be taken into consideration in determining whether there has been, a Spirit Material Adverse Effect); (vi) the taking of any action expressly contemplated by the Offer or at our request; or (vii) any change in the market price or trading volume, or the downgrade in rating, of Spirit’s securities (it being understood that the underlying facts and circumstances giving rise to such event may be deemed to constitute, and may be taken into consideration into determining whether there has been, a Spirit Material Adverse Effect); provided further that the effects or changes set forth in the foregoing clauses (i), (ii) and (iv) shall be taken into account in determining whether there has occurred a Spirit Material Adverse Effect only to the extent such developments have, individually or in the aggregate, a disproportionate impact on Spirit relative to other companies in the airline industry, in which case only the incremental disproportionate impact may be taken into account.
The foregoing conditions are for the sole benefit of JetBlue, the Purchaser and their affiliates and may be asserted by us regardless of the circumstances giving rise to any such conditions or, to the extent permitted by applicable law, may be waived by us in our sole discretion in whole or in part at any time or from time to time before the Expiration Date. We expressly reserve the right to waive any of the conditions to the Offer and to make any change in the terms of or conditions to the Offer. Our failure at any time to exercise our rights under any of the foregoing conditions shall not be deemed a waiver of any such right. The waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances. Each such right shall be deemed an ongoing right which may be asserted at any time or from time to time. A public announcement shall be made of a material change in, or waiver of, the foregoing conditions, and the Offer may, in certain circumstances, be extended in connection with any such change or waiver.
The consummation of the Offer is not subject to any financing condition.
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| 15. | Certain Legal Matters; Regulatory Approvals; Appraisal Rights. |
General
Based on our examination of publicly available information filed by Spirit with the SEC and other publicly available information concerning Spirit, we are not aware of any governmental license or regulatory permit that appears to be material to Spirit’s business that might be adversely affected by our acquisition of Shares pursuant to the Offer, or except as set forth below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for our acquisition or ownership of Shares pursuant to the Offer. Should any such approval or other action be required or desirable, we currently contemplate that, except as described below under “Other State Takeover Statutes,” such approval or other action will be sought. Except as described below, there is no current intent to delay the purchase of Shares tendered pursuant to the Offer pending the outcome of any such matter, but we are unable to predict whether we will determine that we are required to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained (with or without substantial conditions), or that, if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to Spirit’s business or certain parts of Spirit’s business might not have to be disposed of, any one of which could cause us to elect to terminate the Offer without the purchase of Shares thereunder. Our obligation under the Offer to accept for payment and pay for Shares is subject to the conditions set forth in “The Offer — Section 14 — Conditions of the Offer.”
Delaware Business Combination Statute
Spirit is subject to the provisions of Section 203 of DGCL, which imposes certain restrictions on business combinations involving Spirit. For a discussion of the provisions of Section 203 of DGCL, see “The Offer — Section 12 — Purpose of the Offer and the Potential Merger; Plans for Spirit; Statutory Requirements; Approval of the Potential Merger.”
Other State Takeover Statutes
A number of states have adopted laws which purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or which have substantial assets, stockholders, principal executive offices or principal places of business or whose business operations otherwise have substantial economic effects in, such states. Spirit, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. Except as described herein, we do not know whether any of these laws will, by their terms, apply to the Offer, the Potential Merger or any other business combination between us or any of our affiliates and Spirit, and we have not made efforts to comply with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer, the Potential Merger or any other business combination, we believe that there are reasonable bases for contesting such laws.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana could, as a matter of corporate law, constitutionally disqualify a potential acquiror from obtaining voting rights in shares of a target corporation without the prior approval of the remaining stockholders where, among other things, the corporation is incorporated, and has a substantial number of stockholders, in the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a U.S. federal district court in Oklahoma ruled that the Oklahoma statutes were unconstitutional as applied to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a U.S. federal district court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside
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Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a U.S. federal district court in Florida held in Grand Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of Florida.
If any government official or third party seeks to apply any state takeover law to the Offer, the Potential Merger or any other business combination between us or any of our affiliates and Spirit, we will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. If it is asserted that one or more state takeover statutes are applicable to the Offer, the Potential Merger or any other business combination and an appropriate court does not determine that they are inapplicable or invalid as applied to the Offer, the Potential Merger or any other business combination, we might be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and we may be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing, consummating or completing the Offer, the Potential Merger or any other business combination. In such case, we may not be obligated to accept for payment or pay for any tendered Shares. See “The Offer — Section 14 — Conditions of the Offer.”
Antitrust Matters
| • | United States. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the “FTC”), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements. |
Pursuant to the requirements of the HSR Act, we may not consummate the Offer until we have filed a Notification and Report Form with respect to the Offer with the Antitrust Division and the FTC and the waiting period has expired. Unless otherwise extended, the waiting period applicable to the purchase of Shares pursuant to the Offer will expire at 11:59 p.m., New York City time, 15 days following such filing, unless such 15th day is a Saturday, Sunday or other legal public holiday, in which case the waiting period will expire at 11:59 p.m., New York City time, on the next regular business day. We expect to file a Notification and Report Form with respect to the Offer with the Antitrust Division and the FTC on or about May 16, 2022. If filed on that date, the waiting period applicable to the purchase of the Shares pursuant to the Offer will expire at 11:59 p.m., New York City time, on May 31, 2022. However, before such time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer from us. If such a request is made, the waiting period will be extended until 11:59 p.m., New York City time, ten days after our substantial compliance with such request, though it is customary to reach a timing agreement with the Antitrust Division or the FTC to not consummate the Offer for a further period of time after substantial compliance. Thereafter, absent a court order, under U.S. antitrust laws, we can consummate our acquisition of Shares pursuant to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as our acquisition of Shares pursuant to the Offer. At any time before or after the consummation of any such transactions, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or completion of the Potential Merger or seeking divestiture of the Shares acquired in connection with the Offer or divestiture of substantial assets owned by us or Spirit. Private parties and individual state attorneys general may also bring legal action under the antitrust laws. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made, or if such a challenge is made, what the result will be. See “The Offer — Section 14 — Conditions of the Offer” for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. Shares will not be accepted for payment or paid for
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pursuant to the Offer if, before or after the expiration of the applicable waiting period under the HSR Act, the Antitrust Division, the FTC, a state, or a private party has commenced or threatens to commence an action or proceeding against the Offer or Potential Merger as a result of which any of the conditions described in “The Offer — Section 14 — Conditions of the Offer” would not be satisfied.
| • | Competition Laws of Other Jurisdictions. Based upon our review of publicly available information concerning Spirit, there are other jurisdictions outside the United States in which Spirit and JetBlue and their respective subsidiaries conduct business. The antitrust, competition or merger control laws of certain of these jurisdictions may require the submission of a merger control notification with, and the obtaining of the pre-merger approval of, antitrust or competition authorities therein, or the submission of a merger control notification may be advisable in certain of these jurisdictions. After commencement of the Offer, we will seek further information regarding the applicability of the antitrust, competition or merger control laws of any such jurisdictions and currently intend to take such action as they may require or as may be advisable, but no assurance can be given that such approvals will be obtained. Transactions such as our acquisition of Shares pursuant to the Offer are frequently scrutinized by foreign antitrust and competition authorities. Therefore, there can be no assurance that a challenge to the Offer on foreign antitrust or competition grounds will not be made, or if such a challenge is made, what the result will be. See “The Offer — Section 14 — Conditions of the Offer” for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. Shares will not be accepted for payment or paid for pursuant to the Offer if any foreign antitrust or competition authority has commenced or threatens to commence an action or proceeding against the Offer or Potential Merger as a result of which any of the conditions described in “The Offer — Section 14 — Conditions of the Offer” would not be satisfied. |
Other Regulatory Approvals
In addition to what is otherwise discussed in this Offer to Purchase, in connection with the acquisition of Shares pursuant to the Offer or the Potential Merger, we must file notices with, and obtain any approval and authorizations required to be obtained from, the FAA, the DOT and the FCC, as well as other approvals and authorizations to be obtained. If any action is taken before consummation of the Offer by any such government or governmental authority, or if any required approvals, waivers or consents are not obtained, or obtained subject to condition, as a result of which any of the conditions described in “The Offer — Section 14 — Conditions of the Offer” would not be satisfied, we will not be obligated to accept for payment or pay for any tendered Shares pursuant to the Offer. See “Section 14 — Conditions to the Offer.”
Appraisal Rights
Stockholders do not have appraisal rights in connection with the Offer. However, if the Potential Merger is completed, stockholders of Spirit who do not tender their Shares in the Offer continue to hold Shares at the time of completion of the Potential Merger, neither vote in favor of the Potential Merger nor consent thereto in writing and otherwise comply with the applicable statutory procedures under Section 262 of the DGCL will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of such merger) and to receive payment of such fair value in cash, together with a fair rate of interest, if any (all such Shares, collectively, the “Dissenting Shares”). Since appraisal rights are not available in connection with the Offer, no demand for appraisal under Section 262 of the DGCL may be made at this time. Any such judicial determination of the fair value of the Dissenting Shares could be based upon considerations other than or in addition to the price paid in the Offer and the market value of the Shares. Stockholders should recognize that the value so determined could be higher or lower than, or the same as, the price per Share paid pursuant to the Offer or the consideration paid in the Potential Merger. Moreover, we may argue in an appraisal proceeding that, for purposes of such a proceeding, the fair value of the Dissenting Shares is less than the price paid in the Offer.
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If any holder of Shares who demands appraisal under Section 262 of the DGCL fails to perfect, or effectively withdraws or loses, its, his or her rights to appraisal as provided in the DGCL, the Shares of such stockholder will be converted into the right to receive the price per Share paid in the Potential Merger. A stockholder may withdraw a demand for appraisal by delivering to us a written withdrawal of the demand for appraisal and acceptance of the Potential Merger.
Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of such rights. The foregoing summary of the rights of dissenting stockholders under Delaware law does not purport to be a statement of the procedures to be followed by stockholders desiring to exercise any appraisal rights under Delaware law. The preservation and exercise of appraisal rights require strict and timely adherence to the applicable provisions of the DGCL which will be set forth in their entirety in any proxy statement or information statement for the Potential Merger (unless the Potential Merger is effected as a second-step merger pursuant to Section 251(h) of the DGCL or a short-form merger pursuant to Section 253 of the DGCL, in which case they will be set forth in the notice of merger). We recommend that any Spirit stockholders wishing to pursue appraisal rights with respect to the Potential Merger consult their legal advisors.
“Going Private” Transactions
Any Potential Merger would also have to comply with any applicable U.S. federal law. In particular, unless the Shares were deregistered under the Exchange Act prior to such transaction, we may be required to comply with Rule 13e-3 under the Exchange Act. If applicable, Rule 13e-3 would require, among other things, that certain financial information concerning Spirit and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders in such a transaction be filed with the SEC and distributed to such stockholders prior to consummation of the transaction
| 16. | Legal Proceedings. |
We are not aware of any legal proceedings relating to the Offer.
| 17. | Fees and Expenses. |
We have retained Innisfree M&A Incorporated to act as our Information Agent for the Offer and Computershare Trust Company, N.A. to act as the Depositary in connection with the Offer. Each of the Information Agent and the Depositary will receive customary compensation for their respective services, reimbursement for certain reasonable expenses, and indemnification against certain liabilities in connection with the Offer, including certain liabilities under the U.S. federal securities laws.
As part of the services included in such retention, the Information Agent may contact holders of Shares by mail, personal interviews, electronic mail, telephone, telefax and other methods of electronic communication, and may request brokers, dealers, banks, trust companies and other nominees to forward materials relating to the Offer to beneficial owners of Shares.
Except as set forth above, we will not pay any fees or commissions to any broker or dealer or any other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, banks, trust companies and other nominees will, upon request, be reimbursed by us for reasonable and necessary costs and expenses incurred by them in forwarding the Offer materials to their customers.
| 18. | Miscellaneous. |
The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of
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such jurisdiction. We are not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If we become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, we will make a good-faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good-faith effort, we cannot comply with the state statute, we will not make the Offer to, nor will tenders be accepted from or on behalf of, the holders of Shares in that state.
No person has been authorized to give any information or make any representation on behalf of JetBlue or the Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal, and if given or made, such information or representation must not be relied upon as having been authorized.
We have filed with the SEC a Tender Offer Statement on Schedule TO, together with exhibits, pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional information with respect to the Offer. The Schedule TO and any amendments thereto, including exhibits, may be examined and copies may be obtained from the offices of the SEC in the manner described in “The Offer — Section 9 — Certain Information Concerning JetBlue and Purchaser” of this Offer to Purchase.
Neither this Offer to Purchase nor the Offer constitutes a solicitation of proxies for any meeting of stockholders of Spirit, including our solicitation of proxies to be used at the Special Meeting in connection with Spirit’s proposed merger with Frontier and any other matter to be considered at the Special Meeting. Any such solicitation has been or will be made only pursuant to separate proxy solicitation materials complying with the requirements of Section 14(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Unless your Shares are accepted for payment pursuant to the terms and conditions of the Offer prior to the Special Meeting, tendering your Shares pursuant to the Offer will not grant us your proxy with respect to the Special Meeting and is not the same as a vote against the matters to be voted upon at the Special Meeting. For more information on our proxy solicitation with respect to the Special Meeting, please read the JetBlue Definitive Proxy Statement we will file with the SEC and mail to the Spirit stockholders in opposition to the Proposed Frontier Transaction and other related documents we file with the SEC.
SUNDOWN ACQUISITION CORP.
May 16, 2022
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SCHEDULE I: DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
The following table sets forth the name, present principal occupation or employment, and material occupations, positions, offices or employments for the past five years, of each director and executive officer of the Purchaser. The business address and phone numbers of each director and executive officer listed below is in care of JetBlue Airways Corporation, 27-01 Queens Plaza North, Long Island City, New York 11101 and (718) 286-7900, respectively.
None of the directors and executive officers of the Purchaser listed below has, during the past five years: (i) been convicted in a criminal proceeding; or (ii) been a party to any judicial or administrative proceeding that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws. Each person listed below is a citizen of the United States.
| Name and Current Position |
Current Principal Occupation or Employment and Five-Year
Employment | |
| Directors: | ||
| Robin Hayes Member of the board of directors |
2015 to Present – Director, JetBlue. 2015 to 2018 – President and Chief Executive Officer of JetBlue. 2018 to Present – Chief Executive Officer of JetBlue. 2020 to Present – Board Chair of the IATA Board of Governors. 2020 to Present – Director, KeyCorp. | |
| Ursula Hurley Member of the board of directors |
2017 to 2021 – Head of Treasury and Investor Relations of JetBlue. 2021 to Present – Chief Financial Officer of JetBlue. | |
| Brandon Nelson Member of the board of directors |
2017 to 2018 – Vice President, Associate General Counsel of JetBlue. 2018 to Present – General Counsel and Corporate Secretary of JetBlue. | |
| Executive Officers: | ||
| Robin Hayes* President & Chief Executive Officer |
See information above. | |
| Ursula Hurley* Chief Financial Officer & Treasurer |
See information above. | |
| Brandon Nelson* Secretary |
See information above. | |
| * | Serves as both an executive officer and director of the Purchaser. |
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SCHEDULE II: DIRECTORS AND EXECUTIVE OFFICERS OF JETBLUE
The following table sets forth the name, present principal occupation or employment, and material occupations, positions, offices or employments for the past five years, of each director and executive officer of JetBlue. The business address and phone numbers of each director and executive officer listed below is in care of JetBlue Airways Corporation, 27-01 Queens Plaza North, Long Island City, New York 11101 and (718) 286-7900, respectively.
None of the directors and executive officers of JetBlue listed below has, during the past five years: (i) been convicted in a criminal proceeding; or (ii) been a party to any judicial or administrative proceeding that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws. Unless otherwise indicated, each person listed below is a citizen of the United States.
| Name and Current Position |
Current Principal Occupation or Employment and Five-Year
Employment | |
| Directors: | ||
| B. Ben Baldanza Member of the board of directors |
2015 to Present – Owner and Chief Executive Officer of Diemacher, LLC. 2016 to Present – Adjunct Professor of Economics at George Mason University. 2017 to Present – Director, Aurora Parts and Service. 2018 to Present – Director, JetBlue. 2018 to Present – Director, Go First Airlines. 2020 to Present – Director, Six Flags Entertainment Corporation. 2021 to Present – Chief Executive Officer of Semper Paratus Acquisition Corporation. 2021 to Present – Director, Anser Advisory. 2022 to Present – Director, Aerial Vantage. | |
| Peter Boneparth Chairman of the board of directors |
2008 to Present – Director, JetBlue. 2008 to Present – Director, Kohl’s Corporation. 2018 to 2021 – Senior advisor to a division of The Blackstone Group. | |
| Monte Ford Member of the board of directors |
2013 to Present – Director, Akamai Technologies, Inc. 2015 to Present – Principal Partner at Chief Information Officer Strategy Exchange. 2015 to 2021 – Director, Michael’s Stores. 2018 to Present – Director, Iron Mountain Inc. 2021 to Present – Director, JetBlue. | |
| Robin Hayes Member of the board of directors |
2015 to Present – Director, JetBlue. 2015 to 2018 – President and Chief Executive Officer of JetBlue. 2018 to Present – Chief Executive Officer of JetBlue. 2020 to Present – Board Chair of the IATA Board of Governors. 2020 to Present – Director, KeyCorp. | |
| Ellen Jewett Member of the board of directors |
2011 to Present – Director, JetBlue. 2015 to Present – Managing Partner of Canoe Point Capital, LLC. 2017 to Present – Director, Foundation Credit Opportunities (FCO) U.S. and Offshore Feeder Funds. 2018 to Present – Director, Booz Allen Hamilton Holding Corporation. | |
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| Name and Current Position |
Current Principal Occupation or Employment and Five-Year
Employment | |
| Robert Leduc Member of the board of directors |
2016 to 2020 – President of Pratt & Whitney. 2020 to Present – Director, JetBlue. 2020 to Present – Director of Howmet Aerospace. 2020 to Present – Director, AAR Corp. | |
| Teri McClure Member of the board of directors |
2013 to Present – Director, Lennar Corp. 2016 to 2019 – Chief Human Resources Officer and Senior Vice President of Labor at United Parcel Service. 2019 to Present – Director, JetBlue. 2019 to Present – Director, GMS, Inc. 2020 to Present – Director, Fluor Corporation. 2022 to Present – Director, Accelya. | |
| Sarah Robb O’Hagan Member of the board of directors |
2016 to 2018 – Chief Executive Officer of Flywheel Sports. 2016 to Present – Director, Strava. 2018 to Present – Director, JetBlue. 2020 to Present – Chief Executive Officer of EXOS. | |
| Vivek Sharma Member of the board of directors |
2013 to 2019 – Senior Vice President of eCommerce and Digital Guest Experience at The Walt Disney Company. 2016 to Present – Adjunct Professor of Data Science, University of Southern California’s Marshall School of Business. 2017 to 2020 – Director, WASH Multifamily Laundry Systems. 2019 to Present – Chief Executive Officer of InStride. 2019 to Present – Director, JetBlue. | |
| Thomas Winkelmann Member of the board of directors |
2013 to Present – Director, JetBlue. 2017 to 2018 – Chief Executive Officer of airberlin. 2018 to Present – Executive Chair, Zeitfracht Group. | |
| Executive Officers: | ||
| Dave Clark Head of Revenue and Planning |
2017 to 2021 – Vice President, Sales & Revenue Management at JetBlue. 2017 to Present – Director, Airlines Reporting Corporation. 2022 to Present – Head of Revenue and Planning at JetBlue. | |
| Carol Clements Chief Digital and Technology Officer |
2014 to 2018 – Chief Information Officer of Pizza Hut. 2018 to 2021 – Chief Technology Officer of Pizza Hut. 2021 to Present – Chief Digital and Technology Officer of JetBlue. | |
| Joanna Geraghty President and Chief Operating Officer |
2014 to 2018 – Executive Vice President, Customer Experience at JetBlue. 2018 to Present – President and Chief Operating Officer of JetBlue. 2022 to Present – Director, L3Harris Technologies. | |
| Robin Hayes* Chief Executive Officer |
See information above. | |
| Ursula Hurley Chief Financial Officer |
2017 to 2021 – Head of Treasury and Investor Relations at JetBlue. 2021 to Present – Chief Financial Officer of JetBlue. | |
| Brandon Nelson General Counsel and Corporate Secretary |
2009 to 2018 – Vice President, Associate General Counsel at JetBlue. 2018 to Present – General Counsel and Corporate Secretary of JetBlue. | |
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| Name and Current Position |
Current Principal Occupation or Employment and Five-Year
Employment | |
| Laurie Villa Chief People Officer |
2013 to Present – Advisory Board Member, Primate Technologies, Inc. 2014 to 2021 – Senior Vice President & Chief Human Resources Officer of Spirit. 2021 to Present – Chief People Officer at JetBlue. |
| * | Serves as both an executive officer and director of JetBlue. |
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The Letter of Transmittal and certificates representing Shares and any other required documents should be sent to the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
| If delivering by First Class,
Registered or Certified |
If delivering by Express or Overnight Delivery: | |
| Computershare Trust Company, N.A. c/o Voluntary Corporate Actions PO Box 43011 Providence, RI 02940-3011 |
Computershare Trust Company, N.A. c/o Voluntary Corporate Actions 150 Royall Street, Suite V Canton, MA 02021 | |
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY
Questions or requests for assistance may be directed to the Information Agent at the telephone numbers set forth below. Requests for copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and all other related materials may be directed to the Information Agent or brokers, dealers, commercial banks and trust companies, and copies will be furnished promptly at the Purchaser’s expense. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call Toll Free: (877) 800-5190
Banks and Brokers May Call Collect: (212) 750-5833
Exhibit (a)(1)(B)
| THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION |
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
Spirit Airlines, Inc.
at
$30.00 Net Per Share
Pursuant to the Offer to Purchase dated May 16, 2022
by
SUNDOWN ACQUISITION CORP.,
a wholly-owned subsidiary of
JetBlue Airways Corporation
| THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 30, 2022, UNLESS THE OFFER IS EXTENDED |
The undersigned represents that I (we) have full authority to surrender without restriction the certificate(s) for exchange. You are hereby authorized and instructed to prepare in the name of and deliver to the address indicated below (unless otherwise instructed in the boxes on the following page) a check representing a cash payment for shares tendered pursuant to this Letter of Transmittal.
Mail, send or deliver this Letter of Transmittal, or a manually signed facsimile thereof, together with the certificate(s) representing your shares, to the Depositary for this Offer:
| If delivering by First Class,
Registered or Certified |
If delivering by Express or Overnight Delivery: | |
| Computershare Trust Company, N.A. c/o Voluntary Corporate Actions PO Box 43011 Providence, RI 02940-3011 |
Computershare Trust Company, N.A. c/o Voluntary Corporate Actions 150 Royall Street, Suite V Canton, MA 02021 |
Delivery of this Letter of Transmittal to an address other than as set forth above will not constitute a valid delivery to the Depositary. You must sign this Letter of Transmittal in the appropriate space provided therefor below, with signature guaranteed, if required, and complete the IRS Form W-9 included in this Letter of Transmittal or an applicable IRS Form W-8, if required. The instructions set forth in this Letter of Transmittal should be read carefully before you tender any of your Shares (as defined below) pursuant to the Offer (as defined below).
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DESCRIPTION OF SHARES TENDERED
| Name(s) and Address(es) of Registered Holder(s) (Please fill in, if blank, exactly as name(s) appear(s) on Share certificate(s). If there is any error in the name or address shown below, please make the necessary corrections.) |
Shares Tendered (Attach additional list if necessary. See Instruction 3.) | |||||
| Certificate Number(s)* |
Total Number of Shares Represented by Certificate(s)* |
Number of Shares Tendered** | ||||
| Total Shares Tendered | ||||||
| * | Need not be completed by stockholders tendering by book-entry transfer. |
| ** | Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. If your Shares are held in book entry at the Transfer Agent, you will need to indicate the amount of Shares tendered in this column. See Instruction 4. |
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THE UNDERSIGNED TENDERS ALL UNCERTIFICATED SHARES THAT MAY BE HELD IN THE NAME OF THE REGISTERED HOLDER(S) BY THE TRANSFER AGENT.
| ☐ | YES |
| ☐ | NO |
Note: If you do not check either of the boxes above and indicate the amount of shares in the Number of Shares Tendered column above, uncertificated Shares, if any, held in the name of the registered holder(s) by the Transfer Agent will all be tendered.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE FOR THE DEPOSITARY WILL NOT CONSTITUTE A VALID DELIVERY.
THIS LETTER OF TRANSMITTAL AND THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
ALL QUESTIONS REGARDING THE OFFER SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBERS SET FORTH ON THE BACK COVER PAGE OF THE OFFER TO PURCHASE.
This Letter of Transmittal is to be used if certificates are to be forwarded herewith or, unless an Agent’s Message (as defined in the Offer to Purchase) is utilized, if delivery of Shares (as defined herein) is to be made by book-entry transfer to the Depositary’s account at The Depository Trust Company (the “Book-Entry Transfer Facility”), pursuant to the procedures set forth in Section 3 of the Offer to Purchase.
Holders of outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., whose certificates for such Shares are not immediately available or who cannot deliver such certificates and all other required documents to the Depositary on or prior to the expiration of the offer, or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.
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NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
| ☐ | CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY’S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: |
| Name of Tendering Institution |
||
| Account Number |
||
| Transaction Code Number |
||
| ☐ | CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: |
| Name(s) of Tendering Stockholder(s) |
||
| Date of Execution of Notice of Guaranteed Delivery | ||
| Name of Institution that Guaranteed Delivery |
||
If delivery is by book-entry transfer:
| Name of Tendering Institution |
||
| Account Number |
||
| Transaction Code Number |
||
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Ladies and Gentlemen:
The undersigned hereby tenders to Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (together with its subsidiaries, “JetBlue,” “we,” “our” or “us”), the above-described shares of common stock, par value $0.0001 per share (the “Shares”) of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), pursuant to the Purchaser’s offer to purchase all Shares, at a purchase price of $30.00 per Share, net to the tendering stockholder in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2022 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), receipt of which is hereby acknowledged, and in this Letter of Transmittal (as it may be amended or supplemented from time to time, this “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”). The Offer expires at 5:00 P.M., New York City time, on June 30, 2022, unless extended as described in the Offer to Purchase (as extended, the “Expiration Date”). The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer or prejudice your rights to receive payment for the Shares validly tendered and accepted for payment.
Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms and conditions of the Offer as so extended or amended) and subject to, and effective upon, acceptance for payment of the Shares validly tendered herewith and not properly withdrawn prior to the Expiration Date in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of the Purchaser all right, title and interest in and to all the Shares that are being tendered hereby (and all dividends, distributions, rights, other Shares or other securities issued or issuable in respect thereof on or after the date hereof (collectively, “Distributions”)) and irrevocably constitutes and appoints Computershare Trust Company, N.A. (the “Depositary”) the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest in the Shares tendered by this Letter of Transmittal), to: (i) deliver certificates representing such Shares (and all Distributions) (the “Share Certificates”) or transfer ownership of such Shares (and all Distributions) on the account books maintained by The Depository Trust Company (the “Book-Entry Transfer Facility”), together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser; (ii) present such Shares (and all Distributions) for transfer on the books of Spirit; and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and all Distributions), all in accordance with the terms and subject to the conditions of the Offer.
By executing this Letter of Transmittal (or, in the case of a book-entry transfer, by delivery of an Agent’s Message (as defined in the Offer to Purchase) in lieu of this Letter of Transmittal), the undersigned hereby irrevocably appoints the Purchaser, its officers, and any other person designated in writing by the Purchaser as the true and lawful agent, attorney, attorney-in-fact and proxy of the undersigned, each with full power of substitution to: (i) exercise voting and other rights the undersigned in such manner as each such attorney and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper, with respect to all the Shares (and all Distributions) tendered hereby which have been accepted for payment by the Purchaser prior to the time of any vote or other action, at any meeting of stockholders of Spirit (whether annual or special and whether or not an adjourned meeting); and (ii) otherwise act as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to, all the Shares (and all Distributions) tendered hereby and accepted for payment by the Purchaser. This appointment will be effective if and when, and only to the extent that, the Purchaser accepts such Shares for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares by the Purchaser in accordance with the terms of the Offer. Such acceptance for payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such
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Shares (and all Distributions), and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser’s acceptance for payment of such Shares, the Purchaser or its designees must be able to exercise full voting, consent and other rights with respect to such Shares (and all Distributions), including voting at any meeting of Spirit’s stockholders. This proxy will be governed by and construed in accordance with the laws of the State of Delaware and applicable federal securities laws.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer any and all the Shares tendered hereby (and all Distributions) and that, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title to such Shares (and all Distributions), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claims. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares, or the Share Certificates have been endorsed to the undersigned in blank, or the undersigned is a participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of the Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of any and all Shares tendered hereby (and all Distributions). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser all Distributions in respect of any and all Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may deduct from the purchase price of the Shares tendered hereby the amount or value of such Distribution as determined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby acknowledges that delivery of any Share Certificate shall be effected, and risk of loss and title to such Share Certificate shall pass, only upon the proper delivery of such Share Certificate to the Depositary.
The undersigned understands that the valid tender of the Shares pursuant to any of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer. The Purchaser’s acceptance of such Shares for payment will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms or conditions of any such extension or amendment). The undersigned recognizes that under certain circumstances set forth in the Offer, the Purchaser may not be required to accept for exchange any Shares tendered hereby.
Unless otherwise indicated under “Special Payment Instructions,” please issue the check for the purchase price of all of the Shares purchased and, if appropriate, return any Share Certificates not tendered or accepted for payment in the name(s) of the registered holder(s) appearing above under “Description of Shares Tendered” (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility). Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase price of all the Shares purchased and, if appropriate, return any Share Certificates not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under “Description of Shares Tendered.” In the event that the boxes entitled “Special Payment Instructions” and “Special Delivery Instructions” are both completed, please issue the check for the
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purchase price of all the Shares purchased and, if appropriate, return any Share Certificates not tendered or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and, if appropriate, return any such Share Certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled “Special Payment Instructions,” please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility. The undersigned recognizes that the Purchaser has no obligation, pursuant to the “Special Payment Instructions,” to transfer any Shares from the name of the registered holder(s) thereof if the Purchaser does not accept for payment any of such Shares so tendered.
LOST SHARE CERTIFICATES: PLEASE CONTACT SPIRIT’S TRANSFER AGENT, EQUINITI TRUST COMPANY, VIA PHONE TO (800) 468-9716 OR VIA LETTER TO EQ SHAREOWNER SERVICES, PO BOX 64874, ST. PAUL, MN 55164-0874 TO OBTAIN NECESSARY DOCUMENTS TO REPLACE YOUR LOST SHARE CERTIFICATES.
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SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 6, 7 and 8)
To be completed ONLY if the check for the purchase price of Shares purchased (less any required withholding taxes) or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned.
Issue ☐ check ☐ certificates to:
| Name |
| |
| (Please Print) | ||
| Address |
| |
|
| ||
|
| ||
| (Zip Code) | ||
|
| ||
| Taxpayer Identification Number or Social Security No. Also Complete IRS Form W-9 Included Herein or an applicable IRS Form W-8 | ||
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SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, 7 and 8)
To be completed ONLY if the check for the purchase price of Shares purchased (less any required withholding taxes) or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned’s signature(s).
Mail ☐ check ☐ certificates to:
| Name |
| |
| (Please Print) | ||
| Address |
| |
|
| ||
|
| ||
| (Zip Code) | ||
|
| ||
| Taxpayer Identification Number or Social Security No. Also Complete IRS Form W-9 Included Herein or an applicable IRS Form W-8 | ||
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SIGN HERE
(PLEASE ALSO COMPLETE THE ENCLOSED IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL OR AN APPLICABLE IRS FORM W-8)
| Sign Here: |
| |
|
| ||
| Sign Here: |
| |
|
| ||
|
| ||
| (Signature(s) of Stockholder(s)) | ||
| Dated | ||
| , 2022 | ||
| Name(s) |
| |
| (Please Print) | ||
| Capacity (Full Title) |
| |
| Address |
| |
|
| ||
| (Zip Code) | ||
| Area Code and Telephone Number |
|
(Must be signed by registered holder(s) exactly as name(s) appear(s) on share certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.)
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Guarantee of Signature(s)
(If required; see Instructions 1 and 5)
(For use by Eligible Institutions only.
Place medallion guarantee in space below)
| Name of Firm |
| |
| Address |
| |
|
| ||
| (Zip Code) | ||
| Authorized Signature |
| |
|
| ||
| Name | (Please Print) | |
| Area Code and Telephone Number |
| |
| Dated | , 2022 | |
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IMPORTANT TAX INFORMATION
Under United States federal income tax law, a stockholder who is a United States person (as defined for United States federal income tax purposes) surrendering Shares must, unless an exemption applies, provide the Depositary (as payer) with the stockholder’s correct TIN on IRS Form W-9, a copy of which is included in this Letter of Transmittal. If the stockholder is an individual, then the stockholder’s TIN is such stockholder’s Social Security number. If the correct TIN is not provided, then the stockholder may be subject to a $50 penalty imposed by the IRS, and payments of cash to the stockholder (or other payee) pursuant to the Offer may be subject to backup withholding of a portion of all payments of the purchase price.
Certain stockholders (including, among others, corporations and certain foreign individuals and entities) may not be subject to backup withholding and reporting requirements. In order for an exempt foreign stockholder to avoid backup withholding, such person should complete, sign and submit an appropriate IRS Form W-8 signed under penalty of perjury, attesting to his, her or its exempt status. An IRS Form W-8 can be obtained from the Depositary. Such stockholders should consult a tax advisor to determine which IRS Form W-8 is appropriate. Exempt stockholders, other than foreign stockholders, should furnish their TIN, check the “Exempt payee” box on the IRS Form W-9 and sign, date and return the IRS Form W-9 to the Depositary in order to avoid erroneous backup withholding. See the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for additional instructions.
If backup withholding applies, the Depositary is required to withhold and pay over to the IRS a portion of any payment made to a stockholder. Backup withholding is not an additional tax. Rather, the United States federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained from the IRS if required information is timely furnished to the IRS.
Purpose of IRS Form W-9
To prevent backup withholding on payments that are made to a stockholder that is a United States person with respect to the Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of the stockholder’s correct TIN by completing the IRS Form W-9 included in this Letter of Transmittal certifying that: (1) the TIN provided on the IRS Form W-9 is correct (or that such stockholder is awaiting a TIN); (2) the stockholder is not subject to backup withholding because (i) the stockholder is exempt from backup withholding, (ii) the stockholder has not been notified by the IRS that the stockholder is subject to backup withholding as a result of a failure to report all interest and dividends or (iii) the IRS has notified the stockholder that the stockholder is no longer subject to backup withholding; and (3) the stockholder is a United States person (as defined for United States federal income tax purposes). The following section, entitled “What Number to Give the Depositary,” is applicable only to stockholders that are United States persons.
What Number to Give the Depositary
The tendering stockholder is required to give the Depositary the TIN, generally the Social Security number or employer identification number, of the record holder of all the Shares tendered hereby. If such Shares are in more than one name or are not in the name of the actual owner, consult the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, such stockholder should write “Applied For” in the space for the TIN on the IRS Form W-9, sign and date the IRS Form W-9 and sign and date the Certificate of Awaiting Taxpayer Identification Number below. If the tendering stockholder writes “Applied For” in the space for the TIN and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold a portion of all payments of the
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purchase price, which will be refunded if a TIN is provided to the Depositary within 60 days of the Depositary’s receipt of the Certificate of Awaiting Taxpayer Identification Number. If the Depositary is provided with an incorrect TIN in connection with such payments, then the stockholder may be subject to a $50 penalty imposed by the IRS.
NOTE: FAILURE TO COMPLETE AND RETURN THE IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL OR AN APPLICABLE IRS FORM W-8 MAY RESULT IN BACKUP WITHHOLDING AT THE APPLICABLE WITHHOLDING RATE OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE INSTRUCTIONS ENCLOSED WITH THE IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE “APPLIED FOR” IN THE SPACE FOR THE TIN ON THE IRS FORM W-9.
| CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER | ||
| I certify under penalty of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate IRS Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, a portion of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within 60 days. | ||
| Signature | Date | |
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| Form W-9
(Rev. October 2018) Department of the Treasury Internal Revenue Service |
Request for Taxpayer Identification Number and Certification
u Go to www.irs.gov/FormW9 for instructions and the latest information. |
Give Form to the requester. Do not send to the IRS.
| ||
| Print or type See Specific Instructions on page 3.
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1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
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2 Business name/disregarded entity name, if different from above
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| 3 Check appropriate box for federal tax classification of the
person whose name is entered on line 1. Check only one of the
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4 Exemptions (codes apply only to
Exempt payee code (if any)
Exemption from FATCA reporting code (if any)
(Applies to accounts maintained outside the U.S.)
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| ☐ Individual/sole proprietor or single-member LLC
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☐ | C Corporation | ☐ | S Corporation | ☐ | Partnership | ☐ | Trust/estate | ||||||||||||||
| ☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) u
Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check
☐ Other (see instructions) u
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5 Address (number, street, and apt. or suite no.) See instructions.
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Requester’s name and address (optional) | |||||||||||||||||||||
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6 City, state, and ZIP code
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7 List account number(s) here (optional)
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Part I |
Taxpayer Identification Number (TIN) | |
| Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.
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Social security number
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| - |
- | |||||||||||||||||||||||
| or | ||||||||||||||||||||||||
| Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter. |
Employer identification number |
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| - |
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| Part II | Certification |
Under penalties of perjury, I certify that:
| 1. | The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and |
| 2. | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
| 3. | I am a U.S. citizen or other U.S. person (defined below); and |
| 4. | The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.
| Sign Here |
Signature of U.S. person u |
Date u |
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9.
Purpose of Form
An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to
report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following.
• Form 1099-INT (interest earned or paid)
• Form 1099-DIV (dividends, including those from stocks or mutual funds)
• Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
• Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
• Form 1099-S (proceeds from real estate transactions)
• Form 1099-K (merchant card and third party network transactions)
| Cat. No. 10231X | Form W-9 (Rev. 10-2018) | |||
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• Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)
• Form 1099-C (canceled debt)
• Form 1099-A (acquisition or abandonment of secured property)
Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later.
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting, later, for further information.
Note: If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is substantially similar to this Form W-9.
Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:
• An individual who is a U.S. citizen or U.S. resident alien;
• A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States;
• An estate (other than a foreign estate); or
• A domestic trust (as defined in Regulations section 301.7701-7).
Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners’ share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income.
In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States.
• In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity;
• In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and
• In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.
Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).
Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a “saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items.
1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.
Backup Withholding
What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 24% of such payments. This is called “backup withholding.” Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.
You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.
Payments you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the instructions for Part II for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only).
Certain payees and payments are exempt from backup withholding. See Exempt payee code, later, and the separate Instructions for the Requester of Form W-9 for more information.
Also see Special rules for partnerships, earlier.
What is FATCA Reporting?
The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code, later, and the Instructions for the Requester of Form W-9 for more information.
Updating Your Information
You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are a
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C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies.
Penalties
Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Line 1
You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return.
If this Form W-9 is for a joint account (other than an account maintained by a foreign financial institution (FFI)), list first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9. If you are providing Form W-9 to an FFI to document a joint account, each holder of the account that is a U.S. person must provide a Form W-9.
a. Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.
Note: ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application.
b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or “doing business as” (DBA) name on line 2.
c. Partnership, LLC that is not a single-member LLC, C corporation, or S corporation. Enter the entity’s name as shown on the entity’s tax return on line 1 and any business, trade, or DBA name on line 2.
d. Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.
e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a “disregarded entity.” See Regulations section 301.7701-2(c)(2)(iii). Enter the owner’s name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner’s name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity’s name on line 2, “Business name/disregarded entity name.” If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.
Line 2
If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2.
Line 3
Check the appropriate box on line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box on line 3.
| IF the entity/person on line 1 is a(n) . . . |
THEN check the box for . . . | |||
| • Corporation | Corporation | |||
| • Individual
• Sole proprietorship, or
• Single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes. |
Individual/sole proprietor or single-member LLC | |||
| • LLC treated as a partnership for U.S. federal tax purposes,
• LLC that has filed Form 8832 or 2553 to be taxed as a corporation, or
• LLC that is disregarded as an entity separate from its owner but the owner is another LLC that is not disregarded for U.S. federal tax purposes. |
Limited liability company and enter the appropriate tax classification. (P= Partnership; C= C corporation; or S= S corporation) | |||
| • Partnership | Partnership | |||
| • Trust/estate | Trust/estate |
Line 4, Exemptions
If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space on line 4 any code(s) that may apply to you.
Exempt payee code.
• Generally, individuals (including sole proprietors) are not exempt from backup withholding.
• Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends.
• Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions.
• Corporations are not exempt from backup withholding with respect to attorneys’ fees or gross proceeds paid to attorneys, and corporations that provide medical or health care services are not exempt with respect to payments reportable on Form 1099-MISC.
The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.
1—An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2)
2—The United States or any of its agencies or instrumentalities
3—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
4—A foreign government or any of its political subdivisions, agencies, or instrumentalities
5—A corporation
6—A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession
7—A futures commission merchant registered with the Commodity Futures Trading Commission
8—A real estate investment trust
9—An entity registered at all times during the tax year under the Investment Company Act of 1940
10—A common trust fund operated by a bank under section 584(a)
11—A financial institution
12—A middleman known in the investment community as a nominee or custodian
13—A trust exempt from tax under section 664 or described in section 4947
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The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13.
| IF the payment is for . . . | THEN the payment is exempt for . . . | |
| Interest and dividend payments | All exempt payees except for 7 | |
| Broker transactions | Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired prior to 2012. | |
| Barter exchange transactions and patronage dividends | Exempt payees 1 through 4 | |
| Payments over $600 required to be reported and direct sales over $5,0001 | Generally, exempt payees 1 through 52 | |
| Payments made in settlement of payment card or third party network transactions | Exempt payees 1 through 4 |
| 1 | See Form 1099-MISC, Miscellaneous Income, and its instructions. |
| 2 | However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency. |
Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA exemption code.
A—An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
B—The United States or any of its agencies or instrumentalities
C—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
D—A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i)
E—A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)
F—A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state
G—A real estate investment trust
H—A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940
I—A common trust fund as defined in section 584(a)
J—A bank as defined in section 581
K—A broker
L—A trust exempt from tax under section 664 or described in section 4947(a)(1)
M—A tax exempt trust under a section 403(b) plan or section 457(g) plan
Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed.
Line 5
Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the one the requester already has on file, write NEW at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records.
Line 6
Enter your city, state, and ZIP code.
Part I. Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.
If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.
Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN combinations.
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/Businesses and clicking on Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days.
If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write “Applied For” in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.
Note: Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Part II. Certification
To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, 4, or 5 below indicates otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign. Exempt payees, see Exempt payee code, earlier.
Signature requirements. Complete the certification as indicated in items 1 through 5 below.
1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.
2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct
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TIN to the requester, you must cross out item 2 in the certification before signing the form.
3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.
4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), ABLE accounts (under section 529A), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.
What Name and Number To Give the Requester
| For this type of account: | Give name and SSN of: | |||||
| 1. | Individual | The individual | ||||
| 2. | Two or more individuals (joint account) other than an account maintained by an FFI | The actual owner of the account or, if combined funds, the first individual on the account1 | ||||
| 3. | Two or more U.S. persons (joint account maintained by an FFI) |
Each holder of the account | ||||
| 4. | Custodialaccount of a minor (Uniform Gift to Minors Act) | The minor2 | ||||
| 5. | a. The usual revocable savings trust (grantor is also trustee) | The grantor-trustee1 | ||||
| b. So-called trust account that is not a legal or valid trust under state law | The actual owner1 | |||||
| 6. | Sole proprietorship or disregarded entity owned by an individual | The owner3 | ||||
| 7. | Grantortrust filing under Optional Form 1099 Filing Method 1 (see Regulations section 1.671-4(b)(2)(i)(A)) | The grantor* | ||||
| For this type of account: | Give name and EIN of: | |||||
| 8. | Disregarded entity not owned by an individual | The owner | ||||
| 9. | A valid trust, estate, or pension trust | Legal entity4 | ||||
| 10. | Corporation or LLC electing corporate status on Form 8832 or Form 2553 | The corporation | ||||
| 11. | Association, club, religious, charitable, educational, or other tax-exempt organization | The organization | ||||
| 12. | Partnership or multi-member LLC | The partnership | ||||
| 13. | A broker or registered nominee | The broker or nominee | ||||
| 14. | Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments | The public entity | ||||
| 15. | Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B)) | The trust | ||||
1 List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.
2 Circle the minor’s name and furnish the minor’s SSN.
3 You must show your individual name and you may also enter your business or DBA name on the “Business name/disregarded entity” name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.
4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships, earlier.
*Note: The grantor also must provide a Form W-9 to trustee of trust.
Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.
Secure Your Tax Records From Identity Theft
Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.
To reduce your risk:
• Protect your SSN,
• Ensure your employer is protecting your SSN, and
• Be careful when choosing a tax preparer.
If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.
If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.
For more information, see Pub. 5027, Identity Theft Information for Taxpayers.
Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at spam@uce.gov or report them at www.ftc.gov/complaint. You can contact the FTC at www.ftc.gov/idtheft or 877-IDTHEFT (877-438-4338). If you have been the victim of identity theft, see www.IdentityTheft.gov and Pub. 5027.
Visit www.irs.gov/IdentityTheft to learn more about identity theft and how to reduce your risk.
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| Form W-9 (Rev. 10-2018) |
Page 6 |
Privacy Act Notice
Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and
criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.
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INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association, Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) (each, an “Eligible Institution”). Signatures on this Letter of Transmittal need not be guaranteed: (i) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box entitled “Special Payment Instructions” or “Special Delivery Instructions” on this Letter of Transmittal; or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal is to be used either if certificates or book-entry shares at the Transfer Agent are to be forwarded herewith or, unless an Agent’s Message is utilized, if delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof or, in the case of a book-entry transfer, an Agent’s Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal by the Expiration Date. Stockholders who cannot deliver their Shares and all other required documents to the Depositary by the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Purchaser must be received by the Depositary by the Expiration Date; and (iii) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof or, in the case of a book-entry delivery, an Agent’s Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within two New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase.
The method of delivery of Shares, this Letter of Transmittal and all other required documents, including through the Book-Entry Transfer Facility, is at the sole option and risk of the tendering stockholder, and the Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by book-entry confirmation). If certificates for Shares are sent by mail, we recommend registered mail with return receipt requested, properly insured, in time to be received on or prior to the Expiration Date.
No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. By executing this Letter of Transmittal (or a manually signed facsimile thereof), the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto.
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4. Partial Tenders (not applicable to stockholders who tender by book-entry transfer). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the box entitled “Number of Shares Tendered.” In such case, a new certificate for the remainder of the Shares represented by the old certificate will be issued and sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the boxes entitled “Special Payment Instructions” or “Special Delivery Instructions,” as the case may be, on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever.
If any of the Shares tendered hereby is held of record by two or more persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made, or Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be returned in the name of, any person other than the registered holder(s), or if a transfer tax is imposed for any reason other than the sale or transfer of Shares to the Purchaser pursuant to the Offer, then the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) will be the responsibility of the stockholder unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the purchase price of any Shares purchased is to be issued, or any Shares not tendered or not purchased are to be returned, in the name of a person other than the person(s) signing this Letter of Transmittal or if the check or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer may
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request that Shares not purchased be credited to such account at the Book-Entry Transfer Facility as such stockholder may designate under “Special Payment Instructions.” If no such instructions are given, any such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated above.
8. Tax Information. Payments made to certain stockholders pursuant to the Offer may be subject to backup withholding. To avoid backup withholding, each U.S. Holder (as defined in the Offer to Purchase), and any other payee that is a U.S. person for U.S. federal income tax purposes, should provide the Depositary with such stockholder’s or payee’s correct taxpayer identification number and certify that such stockholder or payee is not subject to such backup withholding by completing the enclosed Form W-9. In general, if a stockholder or payee is an individual, the taxpayer identification number is the social security number of such individual. If the Depositary is not provided with the correct taxpayer identification number, the stockholder or payee may be subject to a $50 penalty imposed by the Internal Revenue Service. Certain stockholders or payees (including, among others, all corporations and certain Non-U.S. Holders (as defined in the Offer to Purchase)) are not subject to these backup withholding and reporting requirements. In order to avoid backup withholding, a Non-U.S. Holder should submit a properly completed Form W-8BEN or W-8BEN-E (or other applicable IRS Form W-8), including certification of such holder’s foreign status, and signed under penalty of perjury. Such certificates can be obtained from the Depositary or at https://www.irs.gov.
Failure to complete the enclosed Form W-9 or any other applicable form will not, by itself, cause Shares to be deemed invalidly tendered, but may require the Depositary to withhold a portion (currently 24%) of the amount of any payments made pursuant to the Offer. Backup withholding is not an additional U.S. federal income tax. Rather, the U.S. federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is furnished to the Internal Revenue Service. We recommend that you consult your own tax advisor or the Depositary for further guidance regarding the completion of the enclosed Form W-9 or Form W-8BEN or W-8BEN-E (or other applicable IRS Form W-8) to claim exemption from backup withholding.
9. Mutilated, Lost, Stolen or Destroyed Certificates. If the certificate(s) representing Shares to be tendered have been mutilated, lost, stolen or destroyed, stockholders should: (i) complete this Letter of Transmittal; and (ii) notify Spirit’s transfer agent, Equiniti Trust Company, immediately via phone to (800) 468-9716 or via letter to EQ Shareowner Services, PO Box 64874, St. Paul, MN 55164-0874. Spirit’s transfer agent will provide such holder with all necessary forms and instructions to replace any such mutilated, lost, stolen or destroyed certificates. The stockholder may be required to post a bond as indemnity against any claim that may be made against it with respect to the certificate(s) alleged to have been mutilated, lost, stolen or destroyed. The Depositary will not accept any Letter of Transmittal without the accompanying Shares. Spirit stockholders wishing to tender their certificates must first obtain replacement certificates from Spirit’s transfer agent and present such replacement certificates to the Depositary with this Letter of Transmittal.
10. Irregularities. JetBlue will interpret the terms and conditions of the Offer (including this Letter of Transmittal and the instructions hereto). All questions as to the form of documents and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by us, in our discretion. We reserve the absolute right to reject any and all tenders determined by us not to be in proper form or the acceptance of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any condition of the Offer to the extent permitted by applicable law or any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to the satisfaction of the Purchaser. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Purchaser shall determine. None of the
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Purchaser, JetBlue or any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.
11. Requests for Assistance or Additional Copies. Requests for assistance or additional copies of the Offer to Purchase and this Letter of Transmittal may be obtained from the Information Agent at the telephone numbers set forth below.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call Toll Free: (877) 800-5190
Banks and Brokers May Call Collect: (212) 750-5833
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Exhibit (a)(1)(C)
NOTICE OF GUARANTEED DELIVERY
To Tender Shares of Common Stock
of
Spirit Airlines, Inc.
Pursuant to the Offer to Purchase
Dated May 16, 2022 of
SUNDOWN ACQUISITION CORP.,
a wholly-owned subsidiary of
JetBlue Airways Corporation
This form, or a substantially equivalent form, must be used to accept the Offer (as defined herein) if the certificates for shares of common stock, par value $0.0001 per share of Spirit Airlines, Inc., and any other documents required by the Letter of Transmittal cannot be delivered to the Depositary by the expiration of the Offer. Such form may be delivered or transmitted by e-mail or mail to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
| If delivering by First Class, Registered or Certified Mail: | Via e-mail (for eligible institutions only): |
If delivering by Express or Overnight Delivery: | ||
| Computershare Trust Company, N.A. c/o Voluntary Corporate Actions PO Box 43011 Providence, RI 02940-3011 |
CANOTICEOFGUARANTEE @computershare.com |
Computershare Trust Company, N.A. c/o Voluntary Corporate Actions 150 Royall Street, Suite V Canton, MA 02021 | ||
For information call Innisfree M&A Incorporated at the following numbers:
Stockholders May Call Toll Free: (877) 800-5190
Banks and Brokers May Call Collect: (212) 750-5833
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA AN E-MAIL ADDRESS OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal.
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Ladies and Gentlemen:
The undersigned hereby tenders to Sundown Acquisition Corp., a Delaware corporation and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2022 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and the related letter of transmittal that accompanies the Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”), receipt of which is hereby acknowledged, the number of shares indicated below of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares Tendered
Certificate Numbers (if available)
If delivery will be by book-entry transfer:
Name of Tendering Institution
Account Number
SIGN HERE
(Signature(s))
(Name(s)) (Please Print)
(Addresses)
(Zip Code)
(Area Code and Telephone Number)
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GUARANTEE (Not to be used for signature guarantee)
The undersigned, a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), guarantees: (i) that the above named person(s) “own(s)” the Shares tendered hereby within the meaning of Rule 14e-4 under the Exchange Act; (ii) that such tender of the Shares complies with Rule 14e-4 under the Exchange Act; and (iii) to deliver to the Depositary the Shares tendered hereby, together with a properly completed and duly executed Letter(s) of Transmittal (or manually signed facsimile(s) thereof) and certificates for the Shares to be tendered or an Agent’s Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within two New York Stock Exchange Stock Market trading days of the date hereof. Participants should notify the Depositary prior to covering through the submission of a physical security directly to the Depositary based on a guaranteed delivery that was submitted via DTC’s PTOP platform.
(Name of Firm)
(Address)
(Zip Code)
(Authorized Signature)
(Name)
(Area Code and Telephone Number)
Dated: , 20 .
| DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY. SHARE CERTIFICATES ARE TO BE DELIVERED WITH THE LETTER OF TRANSMITTAL. |
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Exhibit (a)(1)(D)
Letter to Brokers and Dealers with respect to the Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Spirit Airlines, Inc.
at
$30.00 Net Per Share
by
SUNDOWN ACQUISITION CORP.,
a wholly-owned subsidiary
of
JetBlue Airways Corporation
May 16, 2022
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been engaged to act as information agent (the “Information Agent”) in connection with the offer of Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (“JetBlue”), to purchase all of the outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), at $30.00 per Share, net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2022 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and the related letter of transmittal that accompanies the Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”).
Consummation of the Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn on or prior to the Expiration Date (as defined in the Offer to Purchase) a number of Shares which, together with any Shares then owned by JetBlue and its subsidiaries (including the Purchaser), represents at least a majority of the total number of Shares outstanding on a fully diluted basis; (ii) the Agreement and Plan of Merger, dated February 5, 2022 (as amended from time to time, the “Frontier Merger Agreement”), among Spirit, Top Gun Acquisition Corp., a Delaware corporation, and Frontier Group Holdings, Inc., a Delaware corporation, having been validly terminated in accordance with its terms; (iii) the Spirit stockholders having not adopted the Frontier Merger Agreement and not approved the transactions contemplated thereby; (iv) JetBlue, the Purchaser and Spirit having entered into a definitive merger agreement (in form and substance satisfactory to JetBlue in its reasonable discretion) with respect to the acquisition of Spirit by JetBlue providing for a second-step merger pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with Spirit surviving as a wholly-owned subsidiary of JetBlue, without the requirement for approval of any stockholder of Spirit, to be effected promptly following the consummation of the Offer, and such merger agreement having not been terminated and the conditions to effecting the Potential Merger (as defined in the Offer to Purchase) pursuant to Section 251(h) of the DGCL being satisfied upon the acceptance for payment of Shares tendered pursuant to the Offer; (v) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any customary timing agreement with any governmental entity to toll, stay, or extend any such waiting period, or to delay or not to consummate the Offer, having expired or been earlier terminated; (vi) all consents, registrations, notices, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders, and authorizations required to be obtained from, or delivered to, as applicable, the U.S. Federal Aviation Administration, the U.S. Department of Transportation, and the Federal Communications Commission in connection with the consummation of the Offer having been obtained or delivered, as applicable; (vii) all other authorizations, consents, orders, approvals, filings, declarations and expirations of waiting periods required under the antitrust or competition laws of any foreign jurisdictions applicable to the transactions contemplated by the Offer to Purchase having been obtained; (viii) there not having
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occurred any change, event, circumstance, development, condition, occurrence or effect that, in the reasonable judgment of JetBlue has had, or would reasonably be expected to have, individually or in the aggregate, a Spirit Material Adverse Effect (as defined in the Offer to Purchase); (ix) Spirit or any of its subsidiaries or affiliates not being a party to any agreement or transaction having the effect of impairing, in the reasonable judgment of JetBlue, the Purchaser’s or JetBlue’s ability to acquire the Shares or Spirit or otherwise diminishing the expected value to JetBlue or its subsidiaries of the acquisition of Spirit; and (x) the Purchaser being satisfied, in its reasonable judgment, that it will not be subject to the restrictions of Section 203 of the DGCL. Other conditions to the Offer are described in the Offer to Purchase under the heading “The Offer — Section 14 — Conditions of the Offer.” Provided that all conditions of the Offer are satisfied or waived (if such condition is permitted to be waived pursuant to applicable law), the Purchaser will purchase all Shares validly tendered and not validly withdrawn on or prior to the Expiration Date.
For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:
| 1. | Offer to Purchase, dated May 16, 2022; |
| 2. | Letter of Transmittal, for your use and for the information of your clients; |
| 3. | Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), or if the procedures for book-entry transfer cannot be completed, by the expiration of the Offer; |
| 4. | A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer; |
| 5. | IRS Form W-9; and |
| 6. | Return envelope addressed to the Depositary. |
YOUR PROMPT ACTION IS REQUIRED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 30, 2022, UNLESS THE OFFER IS EXTENDED.
The Purchaser will not pay any fees or commissions to any broker, dealer or other person (other than the Information Agent and the Depositary as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse brokers, dealers, banks, trust companies and other nominees for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. The Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal.
In order to accept the Offer, a duly executed and properly completed Letter of Transmittal and any required signature guarantees, or an Agent’s Message (as defined in the Offer to Purchase) in connection with a book-entry delivery of Shares, and any other required documents, should be sent to the Depositary by 5:00 P.M., New York City time, on June 30, 2022.
Any inquiries you may have with respect to the Offer should be addressed to the undersigned, and additional copies of the enclosed materials may be obtained from the Information Agent at the address or telephone numbers set forth on the back cover of the Offer to Purchase.
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Very truly yours,
Innisfree M&A Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU THE AGENT OF THE PURCHASER, JETBLUE, THE INFORMATION AGENT OR THE DEPOSITARY OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
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Exhibit (a)(1)(E)
Letter to Clients with respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Spirit Airlines, Inc.
at
$30.00 Net Per Share
by
SUNDOWN ACQUISITION CORP.,
a wholly-owned subsidiary of
JetBlue Airways Corporation
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 16, 2022 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and the related letter of transmittal that accompanies the Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”) in connection with the offer by Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (“JetBlue”), to purchase all of the outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), at $30.00 per Share, net to the seller in cash, without interest and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. We are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is a form and is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is directed to the following:
| 1. | The tender price is $30.00, net to you in cash, without interest and less any required withholding taxes. |
| 2. | The Offer and withdrawal rights expire at 5:00 P.M., New York City time, on June 30, 2022, unless extended (as extended, the “Expiration Date”). |
| 3. | Consummation of the Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn on or prior to the Expiration Date a number of Shares which, together with any Shares then owned by JetBlue and its subsidiaries (including the Purchaser), represents at least a majority of the total number of Shares outstanding on a fully diluted basis; (ii) the Agreement and Plan of Merger, dated February 5, 2022 (as amended from time to time, the “Frontier Merger Agreement”), among Spirit, Top Gun Acquisition Corp., a Delaware corporation, and Frontier Group Holdings, Inc., a Delaware corporation, having been validly terminated in accordance with its terms; (iii) the Spirit stockholders having not adopted the Frontier Merger Agreement and not approved the transactions contemplated thereby; (iv) JetBlue, the Purchaser and Spirit having entered into a definitive merger agreement (in form and substance satisfactory to JetBlue in its reasonable discretion) with respect to the acquisition of Spirit by JetBlue providing for a second-step merger pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with Spirit surviving as a wholly-owned subsidiary of JetBlue, without the requirement for approval of any stockholder of Spirit, to be effected promptly following the consummation of the Offer, and such merger agreement having not been terminated and the conditions to |
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| effecting the Potential Merger (as defined in the Offer to Purchase) pursuant to Section 251(h) of the DGCL being satisfied upon the acceptance for payment of Shares tendered pursuant to the Offer; (v) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any customary timing agreement with any governmental entity to toll, stay, or extend any such waiting period, or to delay or not to consummate the Offer, having expired or been earlier terminated; (vi) all consents, registrations, notices, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders, and authorizations required to be obtained from, or delivered to, as applicable, the U.S. Federal Aviation Administration, the U.S. Department of Transportation, and the Federal Communications Commission in connection with the consummation of the Offer having been obtained or delivered, as applicable; (vii) all other authorizations, consents, orders, approvals, filings, declarations and expirations of waiting periods required under the antitrust or competition laws of any foreign jurisdictions applicable to the transactions contemplated by the Offer to Purchase having been obtained; (viii) there not having occurred any change, event, circumstance, development, condition, occurrence or effect that, in the reasonable judgment of JetBlue has had, or would reasonably be expected to have, individually or in the aggregate, a Spirit Material Adverse Effect (as defined in the Offer to Purchase); (ix) Spirit or any of its subsidiaries or affiliates not being a party to any agreement or transaction having the effect of impairing, in the reasonable judgment of JetBlue, the Purchaser’s or JetBlue’s ability to acquire the Shares or Spirit or otherwise diminishing the expected value to JetBlue or its subsidiaries of the acquisition of Spirit; and (x) the Purchaser being satisfied, in its reasonable judgment, that it will not be subject to the restrictions of Section 203 of the DGCL. Other conditions to the Offer are described in the Offer to Purchase under the heading “The Offer — Section 14 — Conditions of the Offer.” Provided that all conditions of the Offer are satisfied or waived (if such condition is permitted to be waived pursuant to applicable law), the Purchaser will purchase all Shares validly tendered and not validly withdrawn on or prior to the Expiration Date. |
| 4. | Any stock transfer taxes applicable to the sale of Shares to the Purchaser pursuant to the Offer will be paid by the Purchaser, except as otherwise provided in Instruction 6 of the Letter of Transmittal. |
If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning to us the instruction form below. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf by the Expiration Date.
The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any state in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such state. We are not aware of any state where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If we become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, we will make a good-faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good-faith effort, we cannot comply with the state statute, we will not make the Offer to, nor will tenders be accepted from or on behalf of, the holders of Shares in that state.
Payment for Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by Computershare Trust Company, N.A. (the “Depositary”) of: (i) certificates representing the Shares tendered or timely confirmation of the book-entry transfer of such Shares into the account maintained by the Depositary at The Depository Trust Company (the “Book-Entry Transfer Facility”), pursuant to the procedures set forth in Section 3 of the Offer to Purchase; (ii) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent’s Message (as defined in the Offer to Purchase), in connection with a book-entry delivery; and (iii) any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time depending upon when certificates for or confirmations of book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility are actually received by the Depositary.
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Instruction Form with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Spirit Airlines, Inc.
at
$30.00 Net Per Share
by
SUNDOWN ACQUISITION CORP.,
a wholly-owned subsidiary
of
JetBlue Airways Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated May 16, 2022 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and the related letter of transmittal that accompanies the Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”), in connection with the offer by Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation, to purchase all of the outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation.
The undersigned hereby instruct(s) you to tender the number of Shares indicated below held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal.
The undersigned understand(s) and acknowledge(s) that all questions as to validity, form, eligibility (including time of receipt) and acceptance of any certificate representing Shares submitted on its behalf to Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), will be determined by the Purchaser and/or its affiliates (which may delegate power in whole or in part to the Depositary) in its and/or their discretion.
The method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
| Dated: | , 2022 | |
| Number of Shares to be Tendered: | Shares* | |
| Account Number: |
| |
| Capacity**: |
| |
Signature(s)
Name(s)
3
Address(es)
(Zip Code)
Area Code and Telephone Number
Taxpayer Identification or Social Security Number(s)
| * | Unless otherwise indicated, you are deemed to have instructed us to tender all Shares held by us for your account. |
| ** | Please provide if signature is by an attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or other person acting in a fiduciary or representative capacity. |
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Exhibit (a)(1)(F)
This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase, dated May 16, 2022, and the related Letter of Transmittal (as defined below). The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction. The Purchaser (as defined below) is not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, the Purchaser will make a good-faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good-faith effort, the Purchaser cannot comply with the state statute, the Purchaser will not make the Offer to, nor will tenders be accepted from or on behalf of, the holders of Shares in that state.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Spirit Airlines, Inc.
at
$30.00 Net Per Share
by
Sundown Acquisition Corp.,
a wholly-owned subsidiary
of
JetBlue Airways Corporation
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON JUNE 30, 2022, UNLESS THE OFFER IS EXTENDED.
Sundown Acquisition Corp., a Delaware corporation (the “Purchaser”) and a direct wholly-owned subsidiary of JetBlue Airways Corporation, a Delaware corporation (“JetBlue”), is offering to purchase all of the issued and outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Spirit Airlines, Inc., a Delaware corporation (“Spirit”), at a price of $30.00 per Share, net to the seller in cash, without interest and less any required withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2022 (as it may be amended or supplemented from time to time, the “Offer to Purchase”) and the related letter of transmittal that accompanies the Offer to Purchase (as it may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). In this announcement, unless the context requires otherwise, the terms “we,” “our” and “us” refer to JetBlue and its subsidiaries (including the Purchaser), collectively.
Consummation of the Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn on or prior to the Expiration Date (as defined in the Offer to Purchase) a number of Shares which, together with any Shares then owned by JetBlue and its subsidiaries (including the Purchaser), represents at least a majority of the total number of Shares outstanding on a fully diluted basis; (ii) the Agreement and Plan of Merger, dated February 5, 2022 (as amended from time to time, the “Frontier Merger Agreement”), among Spirit, Top Gun Acquisition Corp., a Delaware corporation (“Frontier Merger Sub”), and Frontier Group Holdings, Inc., a Delaware corporation, having been validly terminated in accordance with its terms; (iii) the Spirit stockholders having not adopted the Frontier Merger Agreement and not approved the transactions contemplated thereby; (iv) JetBlue, the Purchaser and Spirit having entered into a definitive merger agreement (in form and substance satisfactory to JetBlue in its reasonable discretion) with respect to the acquisition of Spirit by JetBlue providing for a second-step merger pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with Spirit surviving as a wholly-owned subsidiary of JetBlue, without the requirement for approval of any stockholder of Spirit, to be effected promptly following the consummation of the
1
Offer, and such merger agreement having not been terminated and the conditions to effecting the Potential Merger (as defined in the Offer to Purchase) pursuant to Section 251(h) of the DGCL being satisfied upon the acceptance for payment of Shares tendered pursuant to the Offer; (v) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any customary timing agreement with any governmental entity to toll, stay, or extend any such waiting period, or to delay or not to consummate the Offer, having expired or been earlier terminated; (vi) all consents, registrations, notices, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders, and authorizations required to be obtained from, or delivered to, as applicable, the U.S. Federal Aviation Administration, the U.S. Department of Transportation, and the Federal Communications Commission in connection with the consummation of the Offer having been obtained or delivered, as applicable; (vii) all other authorizations, consents, orders, approvals, filings, declarations and expirations of waiting periods required under the antitrust or competition laws of any foreign jurisdictions applicable to the transactions contemplated by the Offer to Purchase having been obtained; (viii) there not having occurred any change, event, circumstance, development, condition, occurrence or effect that, in the reasonable judgment of JetBlue, has had, or would reasonably be expected to have, individually or in the aggregate, a Spirit Material Adverse Effect (as defined in the Offer to Purchase); (ix) Spirit or any of its subsidiaries or affiliates not being a party to any agreement or transaction having the effect of impairing, in the reasonable judgment of JetBlue, the Purchaser’s or JetBlue’s ability to acquire the Shares or Spirit or otherwise diminishing the expected value to JetBlue or its subsidiaries of the acquisition of Spirit; and (x) the Purchaser being satisfied, in its reasonable judgment, that it will not be subject to the restrictions of Section 203 of the DGCL. Other conditions to the Offer are described in the Offer to Purchase under the heading “The Offer — Section 14 — Conditions of the Offer.” Provided that all conditions of the Offer are satisfied or waived (if such condition is permitted to be waived pursuant to applicable law), the Purchaser will purchase all Shares validly tendered and not validly withdrawn on or prior to the Expiration Date.
Consummation of the Offer is not subject to any financing condition.
We are seeking to enter into a definitive agreement for the acquisition of Spirit by JetBlue, and are prepared to engage with Spirit immediately. We are making the Offer because the Spirit Board has refused to meaningfully engage with us with respect to our initial proposal to acquire all of the outstanding Shares for $33.00 per Share in cash, made on March 29, 2022, which we believe was clearly superior to the proposed merger contemplated by the Frontier Merger Agreement, pursuant to which Frontier Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving corporation (the “Proposed Frontier Transaction”). Although, under the terms of the Frontier Merger Agreement the Spirit Board is permitted to engage in discussions with us since they determined our proposal could reasonably be expected to result in a Superior Proposal (as defined in the Frontier Merger Agreement), the Spirit Board has refused to meaningfully engage with JetBlue with respect to a negotiated transaction. Because we believe our initial proposal to acquire Spirit was clearly a Superior Proposal, we are making the Offer directly to Spirit stockholders on the terms and conditions set forth in the Offer to Purchase as an alternative to the Proposed Frontier Transaction.
Subject to applicable law, we reserve the right to amend the Offer in any respect (including amending the Offer Price). In addition, in the event that we enter into a merger agreement with Spirit and such merger agreement does not provide for a tender offer, we reserve the right to terminate the Offer, in which case the Shares would, upon consummation of such merger, be converted into the consideration negotiated by us and Spirit and specified in such merger agreement.
The Offer has not been approved or disapproved by the Securities and Exchange Commission (the “SEC”) or any state securities commission, nor has the SEC or any state securities commission passed upon the fairness or merits of the Offer or upon the accuracy or adequacy of the information contained in the Offer to Purchase or the related Letter of Transmittal. Any representation to the contrary is a criminal offense.
The term “Expiration Date” means 5:00 p.m., New York City time, on June 30, 2022, unless extended, in which event “Expiration Date” means the time and date at which the Offer, as so extended, shall expire. We may, in our sole discretion, extend the Expiration Date of the Offer at any time
2
or from time to time for any reason. If the Offer is extended, we will inform the Depositary (defined below) of that fact and will issue a press release announcing the extension, no later than 9:00 a.m., New York City time, on the next business day after the date the Offer was scheduled to expire. See the Offer to Purchase under the heading “The Offer — Section 1 — Terms of the Offer”.
For purposes of the Offer, we will be deemed to have accepted for payment tendered Shares when, as, and if we give oral or written notice of the acceptance to Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”). The Purchaser will pay for Shares accepted for payment pursuant to the Offer by depositing the purchase price with the Depositary, which will act as agent for the tendering stockholders for purposes of receiving payments from the Purchaser and transmitting such payments to the tendering stockholders. Under no circumstances will the Purchaser pay interest on the consideration paid for tendered Shares, regardless of any extension of or amendment to the Offer or any delay in making such payment.
In all cases, the Purchaser will pay for Shares tendered and accepted for payment pursuant to the Offer only after timely receipt by the Depositary of: (i) certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase)); (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) or Agent’s Message (as defined in the Offer to Purchase) in lieu of a Letter of Transmittal; and (iii) any other documents required. For a description of the procedure for tendering Shares pursuant to the Offer, see “The Offer — Section 3 — Procedure for Tendering Shares” in the Offer to Purchase. Accordingly, payment may be made to tendering stockholders at different times if delivery of the Shares and other required documents occurs at different times.
A stockholder may withdraw Shares that it has previously tendered pursuant to the Offer pursuant to the procedures set forth below at any time before the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after July 15, 2022, which is the 60th day from the commencement of the Offer, unless such Shares have already been accepted for payment by the Purchaser pursuant to the Offer. If we extend the Offer, delay acceptance for payment or payment for Shares or are unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may, on our behalf, retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in the Offer to Purchase under the heading “The Offer — Section 4 — Withdrawal Rights”. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal with respect to the Shares must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase, and the notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of Shares, if different from that of the person who tendered the Shares. If the certificates evidencing Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with (except in the case of Shares tendered by an Eligible Institution (as defined in the Offer to Purchase)) signatures guaranteed by an Eligible Institution must be submitted before the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn, or in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. See “The Offer — Section 4 — Withdrawal Rights” in the Offer to Purchase.
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We will interpret, in our discretion, the terms and conditions of the Offer (including the instructions hereto). We will determine, in our discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal. We also reserve the absolute right to waive any defect or irregularity in the withdrawal of Shares by any stockholder, whether or not similar defects or irregularities are waived in the case of any stockholder. None of JetBlue, the Purchaser or any of their respective affiliates or assigns, the Depositary, Innisfree M&A Incorporated, our information agent for the Offer (the “Information Agent”) or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or any waiver of any such defect or irregularity or incur any liability for failure to give any such notification.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference.
In general, the receipt of cash in exchange for Shares pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes. See “The Offer — Section 5 — Certain Material U.S. Federal Income Tax Consequences” the Offer to Purchase. Each holder of Shares should consult its own tax advisor about the particular tax consequences of tendering its Shares in the Offer (including the application and effect of any state, local or non-U.S. income and other tax laws).
The Offer to Purchase and the related Letter of Transmittal contain important information and both documents should be read carefully and in their entirety before any decision is made with respect to the Offer. We are making a request to Spirit for the use of its stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on Spirit’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.
Questions or requests for assistance may be directed to the Information Agent at the telephone numbers set forth below. Requests for copies of the Offer to Purchase, the related Letter of Transmittal and all other tender offer materials may be directed to the Information Agent or brokers, dealers, commercial banks and trust companies, and copies will be furnished promptly at our expense. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call Toll Free: (877) 800-5190
Banks and Brokers May Call Collect: (212) 750-5833
May 16, 2022
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Exhibit (a)(5)(A)
| PRESS RELEASE |
|
JetBlue Urges Spirit Shareholders to Protect Their Interests and ‘Vote No’ on Frontier Transaction at Upcoming Spirit Special Meeting
JetBlue’s proposal offers Spirit’s shareholders and other stakeholders more value, more certainty and more opportunity
Spirit’s conflicted Board rejected JetBlue’s clearly superior offer on baseless grounds and refused to engage constructively – depriving Spirit shareholders of more value and more certainty
Spirit’s antitrust rationale is a smokescreen to distract from the fact that its merger with Frontier faces similar regulatory risk, yet offers no shareholder protections
JetBlue files “Vote No” proxy statement for Spirit special meeting and commences all-cash fully financed tender offer to acquire Spirit at new price of $30 per share
NEW YORK (May 16, 2022) – JetBlue (NASDAQ: JBLU) today announced that it has filed a “Vote No” proxy statement urging Spirit (NYSE: SAVE) shareholders to vote AGAINST the inferior, high risk, and low value Spirit/Frontier transaction at Spirit’s upcoming special meeting.
In addition, JetBlue commenced an all-cash, fully financed tender offer to acquire all of the outstanding shares of Spirit for $30 per share, without interest and less any required withholding taxes. Given the Spirit Board of Directors’ complete unwillingness to share the same necessary diligence information that was shared with Frontier, JetBlue is now offering to acquire Spirit for $30 per share in cash through a fully financed tender offer. This represents a 60% premium to the value of the Frontier transaction as of May 13, 2022 – a very compelling offer and higher than the premium implied by JetBlue’s original proposal. JetBlue is fully prepared to negotiate in good faith a consensual transaction at $33, subject to receiving necessary diligence.
JetBlue launched a website at www.JetBlueOffersMore.com and issued a letter to Spirit shareholders detailing the benefits of its transaction, the certainty of closing, and the misleading statements made by Spirit. In the letter, JetBlue CEO Robin Hayes states:
“JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders. Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges.”
“Yet the Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it. The Spirit Board based its rejection on unsupportable claims that are easily refuted.”
“Ask yourself a simple question: why won’t the Spirit Board engage with us constructively? The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.”
The letter goes on to note that JetBlue’s current proposal still offers more value and certainty for Spirit shareholders than Frontier, and stresses that the company is prepared to engage on the basis of its original proposal, if the Spirit Board acts in good faith:
“Based on the clear superiority of our offer, we expected the Spirit Board to engage constructively. Given its unwillingness to share necessary information or negotiate in good faith, we adjusted our price accordingly, but will work towards a consensual transaction at $33 per share, subject to receiving the information to support it.”
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The full letter follows:
May 16, 2022
Dear Spirit Shareholder,
You have an important choice to make about your investment in Spirit Airlines.
We believe the Spirit Board of Directors (the “Spirit Board”) has failed to act in your best interests by refusing to engage constructively on our clearly superior proposal to acquire Spirit.
JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders. Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges.
Yet the Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it. The Spirit Board based its rejection on unsupportable claims that are easily refuted.
Ask yourself a simple question: why won’t the Spirit Board engage with us constructively? The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.
Given the Spirit Board’s unjustified refusal to engage, we have decided to bring our proposal directly to the Spirit shareholders, and we urge you to vote “AGAINST” the Frontier transaction at Spirit’s upcoming special meeting. This will send a message to the Spirit Board that you want it to negotiate with us in good faith. We also launched an all-cash, fully financed tender offer to purchase all the outstanding shares of common stock at $30.00 per share and we encourage you to underscore your message to Spirit’s Board by tendering your shares into our offer. If the Spirit shareholders vote against the transaction with Frontier and compel the Spirit Board to negotiate with us in good faith, we will work towards a consensual transaction at $33 per share, subject to receiving the information to support it.
Our current proposal offers:
| • | More value and more certainty for Spirit shareholders with our ALL-CASH offer. JetBlue offers you $30 per share in cash, representing a 60% premium to the value of the Frontier transaction as of May 13, 20221, a 77% premium to Spirit’s latest closing price2, and a 38% premium to Spirit’s unaffected share price3 – a very compelling value, and, no matter how you measure it, a higher premium than in our original proposal. |
| • | Even more value potential after diligence and good faith negotiation. Based on the clear superiority of our offer, we expected the Spirit Board to engage constructively. Given its unwillingness to share necessary information or negotiate in good faith, we adjusted our price accordingly, but will work towards a consensual transaction at $33 per share, subject to receiving the information to support it. |
| • | More regulatory certainty through our divestiture commitment and $200 million reverse break-up fee. |
| 1 | Represents premium over $18.81, the implied value of Frontier transaction as of May 13, 2022, based on Frontier’s $8.72 closing share price as of May 13, 2022 and the terms of the Agreement and Plan of Merger, dated as of February 5, 2022 (the “Frontier Agreement”), among Top Gun Acquisition Corp., Frontier Group Holdings and Spirit Airlines. |
| 2 | Represents premium over Spirit’s $16.98 closing share price on May 13, 2022. |
| 3 | Represents premium over Spirit’s $21.73 closing share price on February 4, 2022. |
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In contrast, the proposed Frontier transaction offers Spirit shareholders LESS:
| • | Less value. Our current proposal represents a compelling 60% premium to the value of the Frontier transaction as of May 13, 2022. |
| • | Less value certainty. Frontier’s stock price has declined 30% since the announcement of the Frontier transaction4, resulting in approx. $770 million decrease in the value of the Frontier transaction to you. Plus, the future value of the Frontier / Spirit combined company’s stock is uncertain, especially in a continually challenging operational and market environment. Spirit’s and Frontier’s projections underpinning their transaction are based on flawed assumptions, including with respect to personnel attrition and wage inflation. |
| • | Less regulatory commitments and less closing certainty. Despite having a similar regulatory profile to JetBlue, Frontier offers no divestiture commitment or reverse break-up fee. |
JetBlue Offers More Value and Certainty to Spirit Shareholders – in Any Scenario...
Our current proposal provides superior value to the Frontier offer, regardless of whether either transaction is completed.
| • | When we complete our proposed transaction, Spirit shareholders would receive at least $30.00 per share in cash, compared to $18.815 per share from the Frontier transaction. |
| • | In the unlikely event our proposed transaction is not consummated, Spirit shareholders will receive a reverse break-up fee of approximately $1.83 per share, compared to no break-up fee in the Frontier transaction. We estimate that translates into total economic value of approximately $17 per share from JetBlue against approximately $15 in the Frontier transaction6. |
… And Better Trading Value in the Short Term.
In addition, we expect the outcome of the Spirit special meeting to influence how the Spirit shares will trade in the short term. Based on the trading patterns since the Frontier transaction was announced, we expect that, if the transaction is approved, Spirit’s shares will trade at approximately $177. On the other hand, based on what we observed since our proposal became public, if the Frontier transaction is rejected, we expect Spirit shares to trade between approximately $23.1 and $25.58, at least a 36% premium to Spirit’s latest closing share price9.
| 4 | Represents decline from Frontier’s $12.39 closing share price as of February 4, 2022 to $8.72 closing share price as of May 13, 2022. |
| 5 | Represents the implied value of Frontier transaction as of May 13, 2022, based on Frontier’s $8.72 closing share price as of May 13, 2022 and the terms of the Frontier Agreement. |
| 6 | Estimated as Spirit’s hypothetical unaffected share price, by applying Frontier’s share price performance between February 4, 2022 and May 13, 2022 to Spirit’s $21.73 closing share price on February 4, 2022, and, in the case of our proposal, by adding the value of the reverse break-up fee per share. |
| 7 | Estimated by applying the average percentage difference between the Spirit closing share price and the value of the Frontier transaction between February 4, 2022 and April 4, 2022 (the latest trading day before our proposal was made public) to the $18.81 implied value of Frontier transaction as of May 13, 2022. |
| 8 | Low end of the range estimated applying the average spread between $33 and Spirit’s closing share price between April 5, 2022 (when our proposal was made public) and April 29, 2022 (the last trading day before our proposal was rejected by the Spirit Board) to $30; high end of the range estimated with reference to Spirit’s average closing share price between April 5, 2022 and April 29, 2022. |
| 9 | Represents premium over Spirit’s $16.98 closing share price on May 13, 2022. |
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| Transaction Does Not Close |
Transaction Closes |
Short Term Trading Depending on Meeting Outcome | ||||
| Frontier Transaction | ~15 | ~19 | ~17 | |||
| JetBlue Transaction | ~17 (including RBF |
30-33 | ~23-25 | |||
A vote AGAINST the Frontier transaction is a vote for a higher Spirit share price, regardless of any consideration concerning the actual consummation of either transaction. A vote for the Frontier transaction is a vote for a lower Spirit share price.
JetBlue Is Confident We Will Obtain Regulatory Approval.
A combined JetBlue-Spirit will create a more compelling and viable competitor to the Big Four airlines that control more than 80% of the U.S. market. JetBlue’s entry into new routes triggers fare decreases from legacy airlines that are more significant than those resulting from ultra-low-cost carriers; this phenomenon has been described as the “JetBlue Effect”.
Our recent economic analysis, using Department of Transportation Data, shows JetBlue’s presence on a nonstop route decreases legacy fares by ~16%, about three times as much as the presence of an ultra-low-cost carrier. This phenomenon is well established and foundational to JetBlue’s business model.
We are not the only ones who cite the JetBlue Effect. Coined by an MIT study in 2013, the JetBlue Effect has been acknowledged by the Department of Justice (DOJ) as recently as 2021 when it said, “JetBlue’s reputation for lowering fares is so well known in the airline industry that it has earned a name: the ‘JetBlue Effect.’ JetBlue’s record in Boston and New York illustrates why.”
We are confident we can address any regulatory concerns the Spirit Board, regulators or courts may have through:
| • | JetBlue’s expedited expansion and the resulting net fare decreases; |
| • | demonstrated ease of other ultra-low-cost carriers’ continued expansion; and |
| • | the divestitures we are prepared to undertake. |
Don’t Be Misled: Spirit’s Transaction with Frontier Has Similar Regulatory Risk.
| • | Both transactions would create the #5 player with very similar market share. A combined JetBlue and Spirit would have an 8% market share based on full year 2021 seats compared to 7% for a combined Frontier and Spirit. |
| • | Frontier overlaps with Spirit on significantly more nonstop routes (104) than JetBlue (54)10, and JetBlue has less overlap in flights, seats, and ASMs than Frontier in the metropolitan areas served by both11. |
Spirit’s Suggestion that Our Northeast Alliance Is a Regulatory Obstacle Has No Basis in Fact or in Law.
JetBlue’s Northeast Alliance is already demonstrating its positive benefits for customers in the Northeast. Regardless of what one thinks of the Northeast Alliance, it is irrelevant to our ability to complete the acquisition of Spirit.
| 10 | Based on 2021 domestic Department of Transportation Data. |
| 11 | Based on scheduled flights/seats/ASMs for 2021 including international routes. |
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| • | The Northeast Alliance is a limited, procompetitive alliance with American Airlines focused on unlocking growth for JetBlue in one of the nation’s most constrained geographies, the Northeast US. The alliance creates a compelling third competitor in a market previously dominated by two players and has already started delivering benefits to consumers. |
| • | Divestitures: We will proactively offer the DOJ a remedy package that contemplates the divestiture of all Spirit assets located in the area covered by the Northeast Alliance (New York and Boston) so, as a result of our proposed transaction, we will not increase our presence in these airports. |
| • | The Northeast Alliance litigation will go to trial this September, and we believe the outcome of that trial will not impact the outcome of the regulatory process for the acquisition of Spirit, which will likely take place later. If the court allows the DOJ to block the Northeast Alliance, by definition it will not be an obstacle to the acquisition of Spirit. If we are successful in defending the case, as we think we will be, it will be a testament that the alliance is procompetitive, disproving Spirit’s claim. In either case, the Northeast Alliance litigation does not impact JetBlue’s ability to acquire Spirit. |
Given the clear superiority of our offer, including the regulatory commitments we have made to back up our high confidence in our ability to complete our transaction, why hasn’t the Spirit Board engaged?
Clearly because Spirit’s Board is prioritizing its own self-interest and personal relationships with Frontier over its shareholders’ interests.
There is good reason to believe the Spirit Board is not acting in the best interests of its own shareholders.
| • | Multiple Spirit directors involved in the decision to merge with Frontier have significant ties to Bill Franke, who appointed each to the Spirit Board when he was chairman of Spirit, and while Indigo Partners (the current controlling shareholder of Frontier) was a large shareholder of Spirit. |
| • | This includes McIntyre Gardner, current chairman of Spirit, who replaced Mr. Franke, current chairman of Frontier, both of whom led the negotiations between the two companies. |
| • | 5 of the 8 Spirit directors will continue as Board members of the Frontier / Spirit combined company if the Frontier transaction is consummated. |
After eight months of discussions, Spirit agreed to an inferior transaction with Frontier without considering what other alternatives were available to Spirit’s shareholders. Further, the outsized concessions to Frontier by the Spirit Board do not reflect a meaningful effort to maximize shareholder value.
| • | The final terms of the Frontier transaction reflected only an 18.9% premium to the Spirit share price at the time of the announcement12, compared to an average premium in precedent airline transactions of 86%13. |
| • | The final value of the Frontier transaction reflected only an approximate 6% increase from the terms initially offered by Frontier14. |
| • | The original value of the Frontier transaction of $25.83 per share was significantly below the standalone value resulting from the discounted cash flow analysis of Spirit’s financial advisors15. |
| 12 | Represents premium of the value of the Frontier transaction of $25.83 to Sprit’s $21.73 closing price on February 4, 2022. |
| 13 | Reflects median premium to unaffected price of target in precedent Low Cost Carrier transactions (WestJet-Onex, Virgin America-Alaska, AirTran-Southwest, ExpressJet-Skywest, Midwest Air/TPG & Northwest). |
| 14 | Estimated based on the events occurred on December 15, 2021, described in “Background of the Merger” section of the Spirit Definitive Proxy Statement filed on May 11, 2022. |
| 15 | Based on the “Spirit DCF Range” of $34.00 to $64.00 per Spirit share included in the “Opinion of Barclays Capital Inc,” and Spirit Discounted Cash Flow Analysis resulting in $33.00 to $55.50 range of implied equity value per Spirit common stock, included in the “Opinion of Morgan Stanley & Co. LLC” sections of the Spirit Definitive Proxy Statement filed on May 11, 2022. |
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| • | Frontier is not providing any divestiture commitment or a reverse break-up fee. The absence of both means that despite obvious hurdles for its own transaction, Frontier, at its own option, could simply decline to make any regulatory concessions and abandon the Frontier transaction at no cost (or compensation to Spirit or its shareholders). |
Since our original proposal was made, the Spirit Board consistently refused to engage constructively with us.
| • | On April 7, the Spirit Board determined that our original proposal could reasonably be expected to lead to a “Superior Proposal”; and yet, it refused to provide the limited diligence information we requested which it had already provided to Frontier. |
| • | On April 25, the Spirit Board requested we agree to unprecedented contractual terms as a precursor to sharing the diligence information we had originally requested. |
| • | These demands were off-market and contrasted starkly to the limited regulatory commitments made by Frontier, a transaction with a similar regulatory profile. |
| • | On April 29, we presented an enhanced proposal, which was responsive to the concerns of the Spirit Board on closing certainty and included regulatory commitments representing a significant improvement from those offered by Frontier. |
| • | Two days later, the Spirit Board rejected our enhanced proposal, without ever contacting us to discuss it, and, according to its own proxy, without considering the clearly superior economics. |
By refusing to engage on our original proposal, the Spirit Board has deprived its shareholders of the most attractive value creating opportunity available to them.
WE URGE YOU TO SEND A MESSAGE TO THE SPIRIT BOARD BY VOTING “AGAINST” ALL PROPOSALS RELATED TO THE FRONTIER TRANSACTION AT THE SPIRIT SPECIAL MEETING ON JUNE 10, 2022 AND TENDERING YOUR SHARES INTO OUR OFFER.
In addition to voting “AGAINST” the Frontier transaction at the Spirit Special Meeting, we urge all Spirit shareholders voting against the Frontier transaction to exercise their appraisal rights under Section 262 of the Delaware General Corporation Law, which entitles Spirit shareholders who perfect these rights to the fair value of their shares, as determined by a Delaware court. Spirit, by admission of its own financial advisors, is worth more than the value of the Frontier transaction and this and the superior value of our current proposal, as well as our original proposal, would be factors used by the court in determining fair value of your shares. If the Spirit Board continues to refuse to negotiate with us and the Frontier transaction is approved, appraisal is the only way to capture the value included in our proposals. Please consult your legal advisor before exercising appraisal rights.
Additional details about JetBlue’s superior offer can be found at JetBlueOffersMore.com.
Protect Your Own Best Interests
Our proposal represents a compelling opportunity to receive a significant premium in cash, with greater value and certainty than the Frontier transaction. Spirit’s Board has prevented you from receiving it.
We are fully committed to pursuing our original $33 per share proposal. We urge you to protect your own best interests. Let the Spirit Board know you want the opportunity to receive our superior offer by voting AGAINST the Frontier transaction and tendering your shares in our cash tender offer.
Sincerely,
Robin Hayes
Chief Executive Officer
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Advisors
Goldman Sachs & Co. LLC is serving as JetBlue’s financial advisor and Shearman & Sterling LLP is serving as JetBlue’s legal advisor. Goldman Sachs Bank USA and Bank of America, N.A. are providing committed debt financing for the tender offer.
Forward Looking Statements
Statements in this press release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which represent our management’s beliefs and assumptions concerning future events. These statements are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, those listed in our U.S. Securities and Exchange Commission (“SEC”) filings, matters of which we may not be aware, the coronavirus pandemic including new and existing variants, the outbreak of any other disease or similar public health threat that affects travel demand or behavior, the outcome of any discussions between JetBlue Airways Corporation (“JetBlue”) and Spirit Airlines, Inc. (“Spirit”) with respect to a possible transaction, including the possibility that the parties will not agree to pursue a business combination transaction or that the terms of any such transaction will be materially different from those described herein, the conditions to the completion of the possible transaction, including the receipt of any required stockholder and regulatory approvals and, in particular, our expectation as to the likelihood of receipt of antitrust approvals, JetBlue’s ability to finance the possible transaction and the indebtedness JetBlue expects to incur in connection with the possible transaction, the possibility that JetBlue may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate Spirit’s operations with those of JetBlue, and the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the possible transaction. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Further information concerning these and other factors is contained in JetBlue’s SEC filings, including but not limited to, JetBlue’s 2021 Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur. Our forward-looking statements speak only as of the date of this press release or as of the dates so indicated. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
Additional Important Information and Where to Find It
This press release is provided for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any shares of the common stock of Spirit or any other securities. JetBlue and its wholly-owned subsidiary, Sundown Acquisition Corp., have commenced a tender offer for all outstanding shares of common stock of Spirit and have filed with the SEC a tender offer statement on Schedule TO (including an Offer to Purchase, a Letter of Transmittal and related documents), as may be amended. These documents contain important information, including the terms and conditions of the tender offer, and stockholders of Spirit are advised to carefully read these documents before making any decision with respect to the tender offer.
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Investors and security holders may obtain free copies of these statements and other documents filed with respect to the tender offer at the SEC’s website at https://www.sec.gov. In addition, copies of the tender offer statement and related materials may be obtained for free by directing such requests to the information agent for the tender offer, Innisfree M&A Incorporated, at (877) 800-5190 (toll free for stockholders) or (212) 750-5833 (collect for banks and brokers).
JetBlue has filed a preliminary proxy statement on Schedule 14A with the SEC (“Preliminary Proxy Statement”) and the accompanying BLUE proxy card on May 16, 2022 to be used to solicit proxies in opposition to the proposed business combination between Spirit and Frontier Group Holdings, Inc. (“Frontier”) and the other proposals to be voted on by Spirit stockholders at the special meeting of the stockholders of Spirit to be held on June 10, 2022. JetBlue intends to file other relevant materials with the SEC, including a proxy statement in definitive form (the “Proxy Statement”). This press release is not a substitute for the Proxy Statement or any other document JetBlue, Spirit or Frontier may file with the SEC in connection with the proposed transaction.
STOCKHOLDERS OF SPIRIT ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT, THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE AND ALL OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain a free copy of the proxy statement and other documents filed by JetBlue at the SEC’s website at https://www.sec.gov or by contacting the information agent for the proxy solicitation, Innisfree M&A Incorporated, at (877) 800-5190 (toll free for stockholders) or (212) 750-5833 (collect for banks and brokers).
Participants in Solicitation
JetBlue and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Spirit common stock. Additional information regarding the participants in the proxy solicitation is contained in the Preliminary Proxy Statement.
About JetBlue
JetBlue is New York’s Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando, and San Juan. JetBlue carries customers across the United States, Caribbean and Latin America, and between the U.S. and London. For more information, visit JetBlue.com.
Contacts
JetBlue Corporate Communications
Tel: +1.718.709.3089
corpcomm@jetblue.com
JetBlue Investor Relations
Tel: +1 718 709 2202
ir@jetblue.com
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Exhibit (d)
April 8, 2022
JetBlue Airways Corporation
27-01 Queens Plaza North
Long Island City, NY 11101
Attn: Robin Hayes
Dear Mr. Hayes,
In connection with your and our consideration of a possible negotiated transaction (the “Transaction”) involving Spirit Airlines, Inc. (together with its subsidiaries, “Spirit”) and JetBlue Airways Corporation (together with its subsidiaries, “JetBlue”), Spirit has requested information regarding JetBlue and JetBlue has requested information regarding Spirit. As used herein, the term “party” refers to Spirit or JetBlue, the term “providing party” refers to Spirit with respect to information provided by or on behalf of Spirit and to JetBlue with respect to information provided by or on behalf of JetBlue, and the term “receiving party” refers to Spirit with respect to information provided by or on behalf of JetBlue and to JetBlue with respect to information provided by or on behalf of Spirit, in each case, in connection with the Transaction. Each party, in consideration of receiving such information, agrees as follows:
1. All information (written or oral) relating to a providing party, which a providing party or any of its directors, officers, employees, agents or other advisers (including, without limitation, attorneys, accountants, consultants or financial advisors) (collectively, “Representatives”) furnishes or has furnished to the receiving party or any of its Representatives on or after the date hereof in connection with the Transaction, and all notes, analyses, compilations, forecasts, studies or other documents prepared by the receiving party or its Representatives which contain or reflect such information, are referred to in this letter agreement (this “Agreement”) as the providing party’s “Evaluation Material.” “Evaluation Material” does not include information (i) that is or becomes available to the public other than as a result of an act or omission by the receiving party or any of its Representatives in violation of this Agreement, (ii) that a receiving party or its Representative receives or has received on a non-confidential basis from a source other than the providing party or any of its Representatives, provided that such source is not known to the receiving party or its Representatives to be subject to a contractual, legal, fiduciary or other obligation of confidentiality with respect to such information, (iii) that is already in the possession of the receiving party or any of its Representatives, provided that such information is not known to the receiving party or its Representatives to be subject to a contractual, legal, fiduciary or other obligation of confidentiality to the providing party or (iv) that was independently developed by the receiving party or its Representatives without the use of the Evaluation Material.
2. Each receiving party will disclose the providing party’s Evaluation Material only to the receiving party’s Representatives who need to know such information for the purpose of evaluating or otherwise assisting with the Transaction on behalf of the receiving party and who have been informed by the receiving party of the confidential nature of such Evaluation Material and instructed by the receiving party to comply with the terms of this Agreement. Each receiving party will keep the providing party’s Evaluation Material confidential and will use such Evaluation Material solely for the purpose of evaluating, negotiating or consummating the Transaction. Each receiving party will be responsible for any actions taken by its Representatives that would be deemed a breach of this Agreement if the receiving party had taken such actions.
3. JetBlue shall not enter into any agreement with any financing sources in connection with such Transaction without Spirit’s prior written consent (it being acknowledged and agreed that Spirit has consented to the engagement of Goldman Sachs & Co. LLC). Any financing source consented to by Spirit in accordance with the immediately foregoing sentence shall be treated as a Representative of JetBlue for all purposes hereof unless such financing source executes a confidentiality agreement directly with Spirit.
4. Each party is aware, and will advise its Representatives who are informed as to the matters which are the subject of this Agreement, that the United States securities laws prohibit any person who has received from an issuer any material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
5. In the event that a receiving party or any of its Representatives is requested or required by a governmental authority, to disclose any of the providing party’s Evaluation Material, the receiving party will, to the extent not prohibited by law, rule or regulation or court or administrative order, give the providing party prompt written notice of such request or requirement so that the providing party may seek (at the providing party’s sole expense) an appropriate order or other remedy protecting such Evaluation Material from disclosure, and the receiving party will reasonably cooperate with the providing party to obtain such protective order or other remedy. In the event that such protective order or other remedy is not obtained or the providing party waives its right to seek such an order or other remedy, the receiving party (or its Representatives to whom such request is directed) may, without liability under this Agreement, furnish only that portion of the providing party’s Evaluation Material which, on the advice of its counsel, the receiving party (or such Representatives) is requested or required to disclose, provided that the receiving party gives the providing party written notice of the information to be disclosed as far in advance of its disclosure as practicable and uses its commercially reasonable efforts, at the providing party’s sole expense, to obtain assurances that confidential treatment will be accorded to such information.
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6. Unless and until a definitive agreement between the parties hereto or their respective affiliates (or stockholder(s)) with respect to any Transaction has been executed and delivered, no providing party or Representative of a providing party has made or is making, and no receiving party is relying on, any representation or warranty, express or implied, regarding the accuracy or completeness of any Evaluation Material provided by or on behalf of the providing party, including without limitation any projections, estimates, budgets or information relating to the assets, liabilities, results of operations, condition (financial or otherwise), customers, suppliers or employees of the providing party, and no providing party or Representative of a providing party shall have any liability to the receiving party or any of its Representatives relating to or resulting from the use of Evaluation Material provided by or on behalf of the providing party.
7. In considering a Transaction and reviewing the other party’s Evaluation Material, each party is acting solely on its own behalf and not as part of a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) with any unaffiliated parties. Neither party nor any of its Representatives will disclose the fact that the Evaluation Material has been made available or any of the terms or conditions of the Transaction (except that Spirit may make any such disclosures (x) to Frontier Group Holdings, Inc. in order to comply with the terms of the Agreement and Plan of Merger dated as of February 5, 2022 by and among Frontier Group Holdings, Inc., Top Gun Acquisition Corp. and Spirit Airlines, Inc. (the “Frontier Agreement”) and (y) in connection with the Form S-4, information statement and proxy statement/prospectus contemplated by the Frontier Agreement, in which case of clause (y), JetBlue shall no longer be subject to the restrictions of this sentence with respect to any such information included therein). Notwithstanding the foregoing, each party’s financing sources, financial advisors and accountants may disclose Evaluation Material in response to any audit or examination by, or a blanket document request from, a regulatory or self-regulatory authority, bank examiner or auditor, without giving notice to the other party thereof or cooperating with the other party with respect thereto.
8. Except with the prior permission of the other party, all (i) communications regarding a Transaction, (ii) requests for additional information, (iii) requests for facility tours or management meetings and (iv) questions regarding procedure must be directed to one or more of Messrs. H. McIntyre Gardner, Edward M. Christie, Scott Haralson or Thomas Canfield in the case of requests regarding Spirit, and one or more of Messrs. Peter Boneparth, Robin Hayes or Brandon Nelson or Ms. Ursula Hurley in the case of requests regarding JetBlue. Each party agrees not to knowingly contact any third person having a material business relationship with the other party (other than the other party’s Representatives) regarding the Transaction, except with the prior written permission of the other party, other than communications in the ordinary course of business consistent with past practice and that do not include any communication relating to a Transaction.
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9. [Intentionally Omitted.]
10. Unless and until a definitive agreement between the parties hereto or their respective affiliates with respect to any Transaction has been executed and delivered, neither party nor any of its stockholders or affiliates will be under any legal obligation of any kind whatsoever with respect to a Transaction. Each party reserves the right, in its sole discretion, to reject any and all proposals made by the other party or its Representatives with regard to the Transaction and to terminate discussions and negotiations at any time and for any or no reason.
11. At any time at a providing party’s request, each receiving party and its Representatives will promptly return to the providing party all copies of the providing party’s Evaluation Material, provided that (x) a receiving party and its Representatives may destroy and provide written confirmation to the providing party of the receiving party’s compliance with this paragraph and (y) neither party nor any of its Representatives will be required to erase electronically stored Evaluation Material that has been saved to a back up file in accordance with ordinary electronic back-up practices, legal or regulatory requirements or internal document retention policies or professional standards, on the condition that, except as otherwise required by applicable law (i) personnel whose functions are not primarily information technology, legal or compliance do not access such retained copies, and (ii) personnel whose functions are primarily information technology, legal or compliance in nature access such copies only as reasonably necessary for the performance of their information technology, legal or compliance duties (e.g., for purposes of system recovery). Each party will, and will cause its Representatives to, continue to treat confidentially in accordance with the terms hereof all written Evaluation Material that is retained pursuant to clause (y) of the prior sentence notwithstanding the termination of this Agreement pursuant to Section 14.
12. The parties hereto agree that money damages would not be a sufficient remedy for any breach of this Agreement and, in addition to all other remedies available under applicable law, each party shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach by the other party or its Representatives. Each party will not (and will direct its Representatives not to) oppose the granting of such relief and will waive any requirement for the posting of any bond or other security in connection therewith.
13. No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and signed by each party. No failure or delay by a party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under this Agreement. In the event of any conflict between the terms of this Agreement and the terms of any user, click-through or other similar agreement with
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respect to any electronic, online or web-based data room established by or for either party hereto in connection with a Transaction, the terms of this Agreement shall prevail. This Agreement may be executed in one or more counterparts (including via facsimile or other electronic transmission), each of which will be deemed an original copy of this Agreement, and all of which, taken together, shall be deemed to constitute one and the same agreement.
14. This Agreement and any dispute arising hereunder or in connection with the matters contemplated hereby, whether in contract, tort or otherwise, shall be governed in all respects by the laws of the State of Delaware without giving effect to Delaware principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction. In the event of any litigation arising hereunder or in connection with the matters contemplated hereby, each party agrees to submit to the non-exclusive jurisdiction of Court of Chancery of the State of Delaware.
15. Except as otherwise set forth herein, this Agreement shall remain in effect until the first anniversary of the date hereof; provided that such expiration shall not impair the rights of any parties that may have accrued on or before such termination.
16. This Agreement contains the entire agreement between the parties hereto regarding its subject matter and supersedes all prior agreements, understandings, arrangements and discussions between the parties regarding such subject matter.
[Remainder of page intentionally left blank]
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Please confirm your agreement with the foregoing by signing and returning to the undersigned the duplicate copy of this Agreement enclosed herewith.
| Very truly yours, | ||
| SPIRIT AIRLINES, INC. | ||
| By |
/s/ Edward M. Christie | |
| Name: Edward M. Christie | ||
| Title: President and Chief Executive Officer | ||
| Confirmed and agreed to as of the date first written above: | ||
| JETBLUE AIRWAYS CORPORATION | ||
| By: |
/s/ Brandon Nelson | |
| Name: Brandon Nelson | ||
| Ttile: General Counsel and Corporate Secretary | ||
[Signature page to Confidentiality Agreement]