JetBlue Airways again increased its offer for Spirit Airlines with a shareholder vote for the discounter deal to merge with Frontier Airlines just days later.
Frontier sweetened its offer on Friday. Spirit CEO Ted Christie told CNBC at the time that the Spirit board was still finding a deal to combine with another budget airline, Frontier, for a better option than going with JetBlue.
Spirit shareholders are due to vote on the Frontier deal for money and shares on Thursday; Spirit postponed the vote earlier this month to resume negotiations on a deal with the two airlines.
Each combination will create the fifth largest carrier in the United States. The heated bidding war highlights how JetBlue and Frontier see Spirit as the key to their future growth plans at a time when planes and pilots are in short supply.
Terminal A at LaGuardia International Airport for JetBlue and Spirit Airlines in New York.
Leslie Josephs CNBC
Spirit says it does not believe the deal with JetBlue will be approved by regulators, especially because of its alliance with American Airlines in the northeast.
“After Spirit Board failed to recognize our decidedly better offer, we discussed our offer directly with Spirit shareholders and are now changing our offer in response to shareholder interest to include a monthly shareholder payment that is certainly a significant cash premium. at closing, “JetBlue CEO Robin Hayes said in a statement.
JetBlue’s new offer raises the reversal fee to $ 400 million from $ 350 million if regulators do not approve the deal and includes a dividend for Spirit shareholders of $ 2.50 per share, compared to a previous offer of $ 1.50.
It also includes a “ticking fee” that will pay shareholders 10 cents per share each month from January 2023 by closing or terminating the transaction.
Shares of Spirit rose 5% in off-hours trading on the news, while JetBlue fell less than 1% and Frontier – 1%. Shares of Spirit and Frontier fell sharply in regular trading.
Frontier on Friday increased the cash portion of its offer by $ 2 per share to $ 4.13 and raised its bid for a reversal fee to $ 350 million, in line with JetBlue’s earlier offer.
“We think we have the most convincing offer for shareholders,” Frontier CEO Barry Biffle said in an interview earlier Monday. Biffel is speaking from New York, where he plans to meet with Spirit shareholders this week ahead of Thursday’s vote.
Frontier and Spirit did not immediately comment on JetBlue’s revised offer.
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