AP – Frontier Airlines on Friday added more cash and a larger breakup fee to its offer to buy Spirit Airlines, and the Spirit board repeated its preference for Frontier over a rival bid by JetBlue Airways.
Frontier added USD2 per share to its previous offer, boosting it to USD4.13 in cash plus 1.9126 shares of Frontier for each Spirit share.
The Denver-based airline also raised the amount it would pay Miramar, Florida-based Spirit if antitrust regulators stop the deal – from USD250 million to USD350 million – matching JetBlue’s proposed breakup fee.
Spirit said, given the sweetened terms, its board reiterated its unanimous recommendation that shareholders approve the Frontier offer at a meeting next Thursday.
JetBlue said its proposal remains better than Frontier’s with a higher value, more cash, “more certainty, and more regulatory protections”.
Frontier’s move was the latest gambit in a fight between Frontier and JetBlue to see who gets the nation’s largest discount airline. On Monday, New York-based JetBlue raised its all-cash offer to USD33.50 per share, or over USD3.6 billion. At current value, JetBlue’s proposal is worth more. JetBlue proposes to buy all Spirit shares and reconfigure the budget airline’s planes into JetBlue’s less-cramped layout.
Frontier’s stock-and-cash offer would give Spirit shareholders 48.5 per cent of the new, combined airline – which does not yet have a name. That means investors willing to hold the stock could come out ahead if the shares rise enough in price.