Frontier Airlines raises offer for Spirit
Spirit Airlines on Friday urged its shareholders to back a merger deal with Frontier Group Holdings at a meeting next week after Frontier boosted its offer for the ultra-low-cost carrier.
Spirit is the subject of a bidding war between Frontier and JetBlue Airways.
→ JetBlue introduces an new way to take flight through iIts TrueBlue Loyalty Program.
Both bidders view Spirit as an opportunity to expand their domestic footprints at a time when the U.S. airline industry is dogged by labor and aircraft shortages. Either of the deals would create the fifth-largest U.S. airline.
Under the revised terms, Frontier will bump up the cash component of the deal by $2 per share to $4.13 per share, along with 1.9126 Frontier shares in the cash-and-stock deal. Frontier will prepay $2.22 per share as a cash dividend to Spirit stockholders following approval of the transaction, Reuters reported.
Frontier has also increased its reverse termination fee to Spirit by $100 million to $350 million.
Spirit shareholders are due to vote on the merger deal with Frontier on June 30.
Spirit has repeatedly rejected JetBlue’s offer, saying it has a low likelihood of winning approval from U.S. regulators.
→ JetBlue opens its first destination in Canada.
Yet, JetBlue has not given up on its quest, and has been trying to persuade Spirit shareholders to vote against the deal with Frontier.
On Monday, New York-based JetBlue sweetened its offer for Spirit by $2 to $33.50 per share in cash. Frontier’s offer, at its closing price on Friday, is worth $24.29 in stock and cash.
“A JetBlue transaction faces significantly greater regulatory impediments than a Frontier transaction,” Spirit said.
In a statement late on Friday, JetBlue said it continued to believe its proposal was superior to Frontier’s, but said it will “more thoroughly” review and assess the revised terms of Frontier’s proposal.
Related Topics
Volotea launches new route between Barcelona and Ancona, Italy
Ryanair launches new “Future Flyer Academy” programme for aspiring pilots in Ireland
Spain: Aena airports register record passenger and cargo traffic in March
New culinary highlights in Lufthansa Business Class
Plataforma Informativa de Aviación Comercial líder en América Latina.