Spirit Airlines signed an amended merger agreement with
Frontier Airlines after the latter increased its bid for the carrier, Spirit
announced Friday. The carrier also reiterated its stance that JetBlue’s buyout
proposal is not a superior offer and encouraged stockholders to vote for the
Frontier merger during a special meeting scheduled to take place June 30.
Frontier is in a bidding war for Spirit with JetBlue, which
had upped
its offer for the low-cost carrier to $33.50 per share last week. In its
latest proposal, Frontier is offering Spirit stockholders a bit more than 1.9
shares of Frontier stock for each Spirit share they hold plus $4.13 in cash, up
from $2.13 per share in its initial
bid in February.
In addition, Frontier has upped its reverse termination fee
to $350 million in the event the merger is not approved for antitrust reasons,
matching JetBlue’s reverse termination fee offer. It also agreed to prepay
Spirit stockholders $2.22 per share on a record date to be determined as a cash
dividend following approval of the transaction.
Spirit’s rejection of JetBlue’s proposal continues to hinge
on the carrier’s belief the deal would not gain regulatory approval—mainly
because of JetBlue’s Northeast Alliance with American Airlines and the pending
antitrust suit against it.
“Spirit has long taken the position that excessive
consolidation in the airline industry over the last two decades has resulted in
the three legacy airlines dominating domestic air travel,” Spirit said in
a statement. “Merging Spirit into JetBlue and its Northeast Alliance with
American Airlines will exacerbate regulators’ valid concerns over airline
industry concentration.”
Following the updated merger agreement announcement,
shareholder advisory service Institutional Shareholder Services is now advising
Spirit investors to vote in favor of the Frontier deal, a reversal of its
previous opinion, according
to The New York Times.
JetBlue will “more thoroughly review and assess”
the revised merger agreement between Frontier and Spirit, and will continue its
“vote no” campaign, JetBlue said in a statement.
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