JetBlue Airways Corp. has enhanced its offer to acquire Spirit Airlines, hoping the enhancements will vote out the airline’s pending buyout agreement with Frontier Group Holdings Inc., Reuters reported.
“JetBlue’s meaningfully larger reverse termination fee, coupled with the $1.50 per share prepayment, tips the scales in JetBlue’s favor,” ISS said in a report. Spirit shareholders “may well prefer” a delay in the scheduled vote so the carrier’s board can negotiate with JetBlue, it said.
The proposal offers Spirit shareholders an increase in its share in cash, from $30 to $31.50, equating to $30 per share at deal close and the prepayment of $1.50 per share of the reverse break-up fee. The New York-based airline also raised its break-up fee from $150 million to $350 million.
The modifications were announced just days after Frontier Group Holdings Inc. offered to pay a break-up fee of $250 million in a bid to save its $2.9 billion acquisition of Spirit. Spirit Airline's shares have skyrocketed to 6.2% to $22 premarket, Yahoo! Finance reported.
Despite rejecting JetBlue’s initial offer, Spirit shareholders have agreed to evaluate the updates terms, and all the proposals it has received, with its financial and legal advisers.
“JetBlue is aiming to lure Spirit’s board into talks over the new proposal while also building more support among Spirit shareholders for its all-cash offer ahead of a June 10 ballot,” a Yahoo! report stated. “It needs them to vote against Frontier’s stock-and-cash deal, initially valued at $2.9 billion, to preserve its best chance for a quick infusion of growth that will help it compete against larger U.S. carriers.”