Spirit Airlines (SAVE), mcap=$2.5bn, price $22.97 vs $20.88

Arb pitch:
– Traded below unaffected price with two merger offers.
ULCC offer at 1.91 shares + $2.13 cash (3% spread).
JBLU offer at $33 in cash (60% spread).
– Mgmt reluctant to engage with JBLU stating risks DOJ approval.
– Limited downside if both mergers fail.

– The implied price of ULCC offer at $21.4/share.
JBLU‘s offer at $33/share. – Downside in case both mergers fail at $20/share.

Exp. gain: 60% to $33/share in a merger with JBLU.

Full SAVE write-up (free guest account required):

Published on: June 22, 2022  •  Published by:
Tags:   •    •  

Leave a Reply