Airlines

JetBlue sweetens offer in buyout race for Spirit Airlines

Key Points
  • Under JetBlue's new terms, Spirit shareholders will get $31.50 per share in cash, comprising $30 at deal close and prepayment of $1.50 from a raised reverse break-up fee. Its earlier offer was for $30 per share.
  • The move comes days before a June 10 shareholder vote on a competing offer from Frontier Group Holdings.
  • On Monday, JetBlue raised its reverse break-up fee by $150 million to $350 million, which is payable to Spirit shareholders in case the deal falls through due to antitrust reasons.

In this article

VIDEO4:2204:22
JetBlue 'clearly' has a superior proposal for Spirit Airlines, says CEO Robin Hayes

JetBlue Airways on Monday improved its offer to buy smaller rival Spirit Airlines, as the battle for the low-cost carrier intensifies.

Shares of Spirit jumped 6.2% to $22 premarket.

Under JetBlue's new terms, Spirit shareholders will get $31.50 per share in cash, comprising $30 at deal close and prepayment of $1.50 from a raised reverse break-up fee. Its earlier offer was for $30 per share.

The move comes days before a June 10 shareholder vote on a competing offer from Frontier Group Holdings.

VIDEO2:0602:06
JetBlue sweetens Spirit Airlines deal, increases breakup fee to $350 million

Spirit had rejected JetBlue's offer last month saying it had a low likelihood of winning approval from government regulators.

On Monday, JetBlue raised its reverse break-up fee by $150 million to $350 million, which is payable to Spirit shareholders in case the deal falls through due to antitrust reasons.

Frontier had agreed to pay $250 million in break-up fees.

Last week, proxy advisory firm Glass Lewis recommended that Spirit Airlines investors approve the deal with Frontier Group after another proxy firm, Institutional Shareholder Services Inc, advised against it.