JetBlue renewed its bid to buy smaller rival Spirit as competition heated up for control of the low-cost airline, sending Spirit’s stock up 6.2% to $22 before the market opened. Read more [JetBlue Airlines to Acquire Spirit for $3.6 Billion].
Under the new terms set by JetBlue, Spirit shareholders will receive $31.50 for each share of their stock in cash through a payment of $30 at the close of the deal and an initial payment of up to $1.50 in termination fees raised by the company, given its previous offer was $30 per share. Only one, and as a result its bid is now worth $3.4 billion.
Shareholders are scheduled to vote on Friday on the offer, which will be paid in cash and stock for a total value of $2.9 billion. Spirit said in a statement that the board will evaluate the new JetBlue proposal and will post a response soon, and asked shareholders not to take any action at this time. Read more [JetBlue’s schedule cuts back with staff shortages]Read more [JetBlue Schedule Shrinks With Crew Shortages].
The move comes just days before a June 10 shareholder vote on a rival Frontier bid, and Spirit had rejected JetBlue’s bid last month, saying it had little prospect of getting approved by government regulators.
In the latest deal update, JetBlue raised the termination fee of about $150 million to $350 million, which will be paid to Spirit shareholders if the deal collapses due to antitrust approvals, while Frontier had agreed to pay the termination fee of up to $250 million.
Last week, proxy advisory firm Glass Lewis recommended that Spirit Airlines investors approve the deal with Frontier after another proxy advisory firm called Institutional Shareholder Services recommended to shareholders that the deal be rejected. Read More [Frontier and Spirit Sign $6.6 Billion Merger Deal].