JetBlue submits new improved superior proposal to acquire Spirit

Dergam Mousa

3 years ago

JetBlue monday announced that it has submitted an improved proposal to the Board of Directors of Spiritto acquire all of the outstanding common stock of Spirit Airlines.

→ JetBlue delays launch of flights between Boston and London.

JetBlue’s proposal is a further update to its previous proposals, and offers Spirit stockholders demonstrably superior value, more regulatory protections, and the prepayment of a portion of cash consideration:

Enhanced reverse break-up fee: JetBlue would provide a $350 million ($3.20 per Spirit share1) reverse break-up fee, payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons. This represents an increase of $150 million, or $1.37 per Spirit share, to the reverse break-up fee JetBlue has previously offered to pay, and is $100 million greater than the amount being offer by Frontier.
Accelerated prepayment of $1.50 per share: JetBlue would prepay $1.50 per share in cash (approximately $164 million) of the reverse break-up fee, structured as a cash dividend to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue.
Superior, all-cash premium: JetBlue’s proposal offers Spirit stockholders aggregate consideration of $31.50 per share in cash, comprised of $30 per share in cash at the closing of the transaction and the prepayment of $1.50 per share of the reverse break-up fee.

“Combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for crew members, and more value for stockholders. 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. 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”, JetBlue CEO Robin Hayes said in a letter sent to Spirit’s board of directors.