JetBlue Airways Inc and Spirit Airlines Inc said late Friday they had appealed a court ruling that earlier this week blocked their planned merger.
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And save the soul,
The company announced the appeal in a brief press release that did not provide further details, adding only that the process was “consistent with the requirements of the merger agreement.”
Wall Street was divided over whether airlines would be legally obligated to appeal Tuesday's ruling, which sided with the Justice Department in arguing that a merger between low-cost JetBlue and ultra-low-cost Spirit would hurt competition.
Spirit shares were up 12% after hours Friday, while JetBlue shares were down nearly 2%. Analysts at JP Morgan said this week that the ruling freed JetBlue from a “costly merger.”
Earlier on Friday, Spirit sought to reassure investors about its liquidity and issued upbeat guidance on fourth-quarter revenue. Spirit has accumulated about $5.5 billion in debt, and is reportedly looking for advisors to help with its restructuring.
The likelihood of Spirit attracting a new merger or acquisition offer is low without a debt restructuring. Frontier Group Holdings Inc ULCC,
JetBlue competed for Spirit in 2022, with Frontier eventually withdrawing in July of that year.
“It's clear to us that Spirit is pressuring JetBlue to appeal the antitrust ruling, but we still believe the chances of success are low,” Raymond James analyst Savanthi Seth said in a note earlier Friday.
Seth estimated that the appeal would take four to five months.
Spirit shares have lost 67% over the past 12 months, while JetBlue shares are down 41%. The US Global Jets ETF JETS lost 9% in the same period. These losses contrast with a 24% gain for the S&P 500 SPX.
