JetBlue Airways on Thursday informed Spirit Airlines that it may terminate its merger agreement with the company this weekend. SAVE stock tumbled on the news Friday while JBLU swung higher.
JetBlue told Spirit Airlines that certain closing conditions for its proposed $3.8 billion acquisition have not been met and it may terminate the deal on or after Jan. 28, according to a Friday filing with the Securities and Exchange Commission. The news comes after a U.S. District Judge in Boston blocked the deal last week and sided with the Justice Department, finding JetBlue's acquisition would hamper competition and raise fares for customers.
In a joint statement, Spirit Airlines and JetBlue on Jan. 19 announced they filed appeal notices with the U.S. Court of Appeals for the First Circuit to contest the ruling. Spirit reported the deal remained "in full force and effect" at that time.
In the latest filing Friday, JetBlue said it will continue to evaluate its options under the merger agreement and will fulfill all obligations under the deal until it is terminated.
Spirit Airlines, JBLU Stock
Spirit Airlines tumbled 13.4% Friday to near its record closing low of 5.70 on Jan. 18. Shares plummeted 55% in the week ended Jan. 19 after the merger was blocked.
Spirit Airlines has collapsed 62% so far this year.
JBLU stock surged 3.6% Friday. JetBlue is trading above its 50-day line, but still nearly 43% below a July high.
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