Spirit shareholders urged to vote for sweetened Frontier offer

Spirit Airlines has been the subject of a bidding war between Frontier Group and JetBlue Airways since April

Frontier Group's latest offer for Spirit Airlines has the advisory firm Institutional Shareholder Services Inc (ISS) reversing its opinion about a deal.

ISS is now urging shareholders of Spirit Airlines to vote for a proposed merger with Frontier's parent company.

That's a change from a month ago when the advisory firm asked Spirit shareholders to reject Frontier's offer, saying JetBlue's competing offer of $30 a share is superior from a financial standpoint.

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A Frontier Airlines airplane taxis past a Spirit Airlines aircraft at Indianapolis International Airport in Indianapolis, Indiana. (Photographer: Luke Sharrett/Bloomberg via Getty Images / Getty Images)

Since early April, Spirit has been the subject of a bidding war between Frontier and JetBlue Airways Corp.

THE RACE FOR SPIRIT AIRLINES: JETBLUE, FRONTIER JOCKEY FOR WIN

"On balance, support for the merger with Frontier on the revised terms is warranted," the proxy advisory firm said in a report published late Friday.

Spirit Airlines on Friday said that Frontier sweetened its offer, raising its cash offer by $2 per share and urged its shareholders to back a merger deal with Frontier at a meeting next week.

Airlines

A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images / Getty Images)

JetBlue had sweetened its offer for Spirit by $2 to $33.50 per share in cash, earlier this month.

JETBLUE UPS ANTE FOR SPIRIT

A vote by Spirit shareholders on the merger with Frontier is set for June 30.

Ticker Security Last Change Change %
SAVE SPIRIT AIRLINES INC. 3.59 -0.29 -7.47%
ULCC FRONTIER GROUP HOLDINGS 4.75 -0.40 -7.67%

ISS said the current offer from Frontier  matches the $2.00 increase in JetBlue's offer price and also provides a higher prepayment of $2.22 per share compared to $1.50 per share from JetBlue.

JETBLUE OFFERS TO BUY SPIRIT AIRLINES FOR ABOUT $3.6 BILLION CASH

Frontier also increased its reverse termination fee to Spirit by $100 million to $350 million.

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Spirit has repeatedly rejected JetBlue's offer on concerns about winning approval from U.S. regulators.

Reuters contributed to this report.