JetBlue now says that it could back out of the acquisition just a week after the company said it intended to appeal a judge’s decision to block the deal.
JetBlue Airways said on Friday that it might back out of a $3.8 billion acquisition of Spirit Airlines after a federal judge blocked the deal.
The announcement comes just a week after JetBlue and Spirit had said they would appeal the decision, which was made in an antitrust case brought by the Justice Department.
In a regulatory filing on Friday, JetBlue said that the deal could be terminated after Sunday if certain conditions weren’t met. Spirit said in its own filing that it disagreed with JetBlue’s contention and believed “there is no basis for terminating” the deal.
A federal judge in Boston blocked the proposed merger on Jan. 16, ruling that Spirit plays an important role in keeping airline fares low and that a takeover by JetBlue would hurt travelers. The ruling was a win for the Justice Department, which under President Biden has sought to limit corporate consolidation across the economy.
The companies said last week that they were preparing an appeal. As part of the merger agreement, JetBlue agreed to pay Spirit and its shareholders a combined $470 million if regulators blocked the deal.
Spirit’s share price tumbled about 16 percent on Friday morning. Its stock has lost more than half of its value since the deal was blocked because the company is not profitable and investors are worried the airline is shouldering too much debt. Spirit has also been forced to ground some of its jets because of an engine problem.
The share price of JetBlue, which could save billions of dollars by not pursuing an appeal and going through with the deal, was up a little on Friday morning.
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