After Frontier Airlines made changes to its merger offer last week, officials from JetBlue Airways submitted an improved bid to purchase the airline.
As part of the revised proposal, the carrier would give Spirit shareholders $31.50 per share in cash, which is comprised of $30 per share at deal close and the prepayment of the reverse break-up fee.
If the improved bid is approved, the $1.50 per share added to the deal will be paid as a cash dividend. The previous offer of $30 per share was not enough for stockholders to vote for the Frontier proposal.
The reverse break-up fee has been raised by $150 million to $350 million, which will be paid to Spirit shareholders if the deal falls through.
A spokesman for the airline said that they remained committed to acquiring the airline. After listening to your stockholders and affirming with our Board the significant benefits to all stakeholders of combining, we are pleased to submit this improved proposal, which we believe Spirit stockholders will welcome.
The Improved Proposal, which you are permitted to do under the Frontier Agreement and are required to do in the exercise of your fiduciary duties, should be considered by you.
After Frontier updated its own proposal to purchase Spirit last week, it included a $250 million termination fee to provide stockholders with protection to feel more comfortable with the merger agreement.
The offer was endorsed by the directors of both airlines according to Ted Christie. The unanimous support of the Spirit board will allow the stakeholders to vote on Frontier's offer.
In an attempt to block the merger, the airlines offered vastly different amounts of money. The government is scrutinizing the New York-based carrier's deal with American Airlines.
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