Frontier Airlines plane near Spirit Airlines plane at Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.
Joe Riddle Getty Images
Frontier Airlines sweetened its offer to merge with another budget company, Spirit, less than a week before Spirit shareholders voted in favor of the deal.
The new offer of $ 4.13 per share, $ 2 per share higher than Frontier’s original offer for money and shares, came after JetBlue Airways repeatedly increased its own offer to buy Spirit directly in a all-money deal.
The battle for Miramar, Florida Spirit has intensified in recent weeks. JetBlue claims that its deal will help it compete better with major carriers and expand rapidly at a time when new planes and pilots are in short supply.
JetBlue will take over Spirit, while the Frontier-Spirit combination will create a giant discount carrier. Each deal will create the country’s fifth-largest airline.
Spirit shareholders are due to vote on the Frontier deal on Thursday.
Spirit CEO Ted Christie told CNBC that the airline’s board had evaluated JetBlue’s latest offer and there were still doubts that regulators would approve the deal. The board, he said, still sees Frontier’s commitment as a “superb deal”.
“We will review and evaluate in more detail the revised terms of the Frontier-Spirit merger agreement and intend to continue our campaign against the lower Frontier deal at the special meeting,” JetBlue said in a statement on Friday.
The new offer, which was announced late Friday, also increases the proposed reversal fee by $ 100 million to $ 350 million if the deal is not approved by regulators. This is in line with the backfill fee offered by JetBlue. Frontier’s new offer includes a $ 2.22 prepayment of Spirit shareholders.
Christie said the board still has regulatory concerns about JetBlue’s Northeast alliance with American Airlines, which allows carriers to coordinate flights and book passengers on the other’s planes. Last year, the Ministry of Justice filed a lawsuit to break up the partnership.
The shares of the three airlines were slightly changed in trading after business hours on Friday.
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