JetBlue Airways once again increase its offer for Spirit Airlines with a shareholder voting for the discounter’s agreement to merge with Frontier Airlines just a few more days.
Border sweeten its offer on Friday. Spirit CEO Ted Christie told CNBC later that Spirit’s board still sees a tie-up with low-cost airline Frontier as a better option than JetBlue.
Spirit shareholders will vote on the Frontier cash and stock deal on Thursday; Spirit postponed the vote earlier this month to continue negotiating the deal with both airlines.
Both combinations would create the United States’ fifth largest aircraft carrier. The heated bidding war underscores how both JetBlue and Frontier see Spirit as key to their future growth plans at a time when aircraft and pilots are in short supply.
Terminal A of LaGuardia International Airport is for JetBlue and Spirit airlines in New York.
Leslie Josephs | CNBC
Spirit has argued that it does not think a JetBlue deal will pass regulators, especially because of its alliance with American Airlines In the northeast.
“After the Spirit Board of Directors failed to recognize our definitive superior’s offer, we discussed our offer directly with Spirit shareholders and are currently revising our proposal in response. shareholder interest, including a monthly payment to shareholders, with certainty Robin Hayes, JetBlue CEO said in a statement.
JetBlue’s new offer increases the reverse parting fee from $350 million to $400 million if managers don’t approve the deal and includes a dividend for Spirit shareholders of $2.50 a share. coupons, up from the previous offer of $1.50.
It also includes an “accumulation fee,” which will pay shareholders 10 cents a share per month from January 2023 through the completion or termination of the agreement.
Shares of Spirit were up 5% in after-hours trading on the news, while JetBlue was down less than 1% and Frontier’s was up 1%. Spirit and Frontier shares fell sharply in regular trading.
Frontier on Friday increased the cash portion of its bid by $2 a share to $4.13 and raised its reverse break-up fee proposal to $350 million, in line with JetBlue’s previous offer.
“We think we have the most compelling offer for shareholders,” Frontier CEO Barry Biffle said in an interview earlier on Monday. Biffle spoke from New York, where he is planning to meet with Spirit shareholders this week ahead of Thursday’s vote.
Frontier and Spirit did not immediately comment on the revised JetBlue proposal.
