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.

Valuation:
– 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):
https://valueinvestorsclub.com/idea/SPIRIT_AIRLINES_INC/0435807025

Published on: June 22, 2022  •  Published by:
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