JetBlue submits improved offer for Spirit Airlines ahead of shareholder vote

Jun. 06, 2022 7:23 AM ETJetBlue Airways Corporation (JBLU), SAVE, ULCCBy: Kevin P. Curran, SA News Editor10 Comments

Spirit Airlines Jet

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JetBlue Airways (NASDAQ:JBLU) is upping its offer for Spirit Airlines (NYSE:SAVE) as it attempts to convince shareholders to forego Frontier Air Group’s (NASDAQ:ULCC) competing offer.

In order to assuage concerns voiced by Spirit Airlines (SAVE) CEO Ted Christie that the offer is merely “cynical”, the new offer includes an enhanced reverse break-up fee of $350M, $150M more than previously offered.

The $30 per share offer previously offered was also cited again as superior overall to the merger agreement with Frontier Air Group (ULCC) that Spirit has consistently shown favorability for given better perceived regulatory approval probability. In order to sweeten the proposal, a prepayment of $1.50 per share would be offered as a cash dividend to Spirit shareholders if the deal is approved.

“The key features of our Improved Proposal – the up-front cash payment and increased reverse break-up fee – reflect the seriousness of our commitment and underscore our confidence in completing this transaction,” JetBlue CEO Robin Hayes said. “Additionally, given the similar regulatory risks of the two transactions and the increased reverse break-up fee we are prepared to provide, we believe our Improved Proposal remains a Superior Proposal by any measure.”

Shareholders will vote on the proposed merger with Frontier Air Group on Friday.

The new proposal could cause Frontier to reassess its own breakup fee, which was just raised on Friday.

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