JetBlue has updated for a second time its bid to acquire
Spirit Airlines, the company announced Monday, after Spirit and Frontier on
Thursday added a reverse termination fee of $250 million in the event the deal
does not go through due to antitrust reasons.
JetBlue now is offering $31.50 per share in cash, with $30 per
share at the close of the deal and a $1.50 per share prepayment of the reverse
break-up fee should Spirit stockholders vote to approve JetBlue’s acquisition
of the low-cost carrier. The revised proposal is up from $30
last offered in May, but below its initial
bid of $33 per share. The New York-based carrier also is increasing the
aggregate reverse break-up fee to $350 million from $200 million should the requisite
antitrust approvals not be obtained.
The “valid termination” of the Frontier Airlines
merger agreement is a condition to the offer, according to JetBlue. Frontier in
February announced an agreement
to purchase Spirit for about $2.9 billion in cash and stock.
In early May, the Spirit
board unanimously rejected JetBlue’s previous proposal, citing the U.S.
Department of Justice’s antitrust suit against JetBlue’s partnership with
American Airlines, dubbed the Northeast Alliance, as a key reason why it
expects a would-be acquisition of Spirit by JetBlue to fail.
JetBlue has not agreed to end its agreement with American
Airlines, as previously requested by Spirit, and noted in its latest offer Spirit
board’s “unwillingness to share due diligence information or negotiate in
Proxy advisory firm Glass Lewis on Thursday recommended that
Spirit stockholders vote for the Frontier proposal; however, on May 31, another
proxy advisory firm Institutional Shareholder Services ISS recommended Sprit
shareholders reject the Frontier offer.
Spirit is to hold a shareholder meeting on Friday, June 10,
for a vote on its proposed merger with Frontier.
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