JetBlue will not back down, continues its fight for Spirit Airlines
Since early April, Spirit has been the subject of a bidding war between Frontier and JetBlue Airways Corp
JetBlue Airways on Monday ramped up its battle with Frontier Group Holdings for the right to acquire Spirit Airlines as the bidding war for the low-cost airline nears its end.
Both JetBlue and Frontier view the potential purchase of Spirit as an opportunity to expand domestic travel within their respective companies as the airline industry grapples with worker and aircraft shortages. The Spirit acquisition for either carrier would create the fifth-largest U.S. airline.
A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images / Getty Images)
The latest offer from JetBlue includes a "ticking fee" that would grant Spirit shareholders a monthly prepayment of 10 cents per share between January 2023 and when the deal closes, which would increase the overall value of the deal to $34.15 per share.
JetBlue also raised the breakup fee to Spirit by $50 million to reach a total of $400 million if the deal does not receive regulatory approval. The carrier will also prepay $2.50 per share as a cash dividend to Spirit stockholders after the transaction is approved.
SPIRIT SHAREHOLDERS URGED TO VOTE FOR SWEETENED FRONTIER OFFER
Spirit Airlines plane parked at an airport. (Emma Wareus)
The airlines' new offer comes after Frontier upped its bid for Spirit last Friday. Frontier's latest offer convinced shareholder advisory firm Institutional Shareholder Services to change its position and recommend Spirit shareholders support a merger between the two carriers. Another proxy firm, Glass Lewis, has also backed the Frontier deal.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SAVE | SPIRIT AIRLINES INC. | 1.08 | -0.24 | -18.37% |
| JBLU | JETBLUE AIRWAYS CORP. | 7.06 | -0.05 | -0.70% |
| ULCC | FRONTIER GROUP HOLDINGS | 6.80 | +0.07 | +1.04% |
THE RACE FOR SPIRIT AIRLINES: JETBLUE, FRONTIER JOCKEY FOR WIN
Spirit shareholders are scheduled to vote on the Frontier merger deal on June 30.
Frontier CEO Barry Biffle said Monday that the airline company's updated offer for Spirit will be enough to reach a merger deal with the carrier.
A Frontier Airlines airplane taxis past a Spirit Airlines aircraft at Indianapolis International Airport in Indianapolis, Indiana, U.S., on Monday, Feb. 7, 2022. (Luke Sharrett/Bloomberg via Getty Images / Getty Images)
"We're really excited about it and getting good feedback," Biffle said.
But JetBlue is prepared to keep fighting to secure a deal with the low-cost airline. JetBlue again urged Spirit shareholders on Monday to vote against the merger deal with Frontier.
JetBlue argued that its merger proposal offers Spirit shareholders "more value and certainty."
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Reuters contributed to this report.