JetBlue ups ante for Spirit
JetBlue Airlines gets more aggressive with Spirit despite more snubs
The battle for Spirit Airlines escalated Monday with JetBlue Airlines upping its offer for the budget carrier and imploring its board to negotiate in good faith.
This is its third proposal since March to acquire all the outstanding common stock of Spirit Airlines Inc., and it comes just days before its shareholders are supposed to vote on Frontier's bid.
|SAVE||SPIRIT AIRLINES INC.||15.40||+0.20||+1.28%|
|JBLU||JETBLUE AIRWAYS CORP.||7.18||+0.35||+5.12%|
|ULCC||FRONTIER GROUP HOLDINGS||9.14||+0.87||+10.52%|
However, JetBlue made it clear it isn't backing down, even after multiple rejections, saying in a letter to the budget carrier's board of directors that it remains "fully committed to acquiring Spirit."
SPIRIT, FRONTIER AND JETBLUE: PROS AND CONS
JetBlue's "improved superior proposal" includes a $350 million break-up fee, which is up from its previous offer of $150 million "and is $100 million greater than the amount being offered by Frontier," the airline said.
Those funds are payable to Spirit shareholders in the event that the deal flops.
JetBlue is also offering shareholders $31.50 per share in cash, which is up from its earlier offer of $30 per share. The revised offer includes $1.50 a share which will be paid to Spirit shareholders in a cash dividend if the deal moves ahead.
JETBLUE OFFERS TO BUY SPIRIT AIRLINES FOR ABOUT $3.6 BILLION CASH
"We urge you to consider our Improved Proposal, which you are permitted to do under the Frontier Agreement and are required to do in the exercise of your fiduciary duties, and negotiate with us in good faith to reach a consensual transaction…"
In early May, Spirit’s board rejected JetBlue's original $3.6 billion bid, determining it was not a superior proposal to its previous agreement to merge with Frontier Airlines.
Shortly after, Spirit Airlines' board of directors recommended that its shareholders reject JetBlue's $30 per share tender offer, arguing the takeover bid "has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders."
Frontier CEO Barry Biffle previously said in a statement that Frontier was "pleased that the Spirit Board of Directors has again reaffirmed its commitment to combining with Frontier, which increases competition by bringing more ultra-low fares to more travelers and delivering substantial shareholder value."
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Frontier said its deal with Spirit is expected to "drive enhanced value for shareholders of both companies" and add "10,000 direct jobs and thousands of additional jobs at the companies’ business partners by 2026."
Similarly, JetBlue is also arguing that "combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for Crewmembers and Team Members, and more value for stockholders."
FOX Business' Lucas Manfredi contributed to this report.