JetBlue Offers Second Revised Takeover Proposal

JetBlue has updated for a second time its bid to acquire Spirit Airlines, the company announced Monday, after Spirit and Frontier on Thursday added a reverse termination fee of $250 million in the event the deal does not go through due to antitrust reasons. 

JetBlue now is offering $31.50 per share in cash, with $30 per share at the close of the deal and a $1.50 per share prepayment of the reverse break-up fee should Spirit stockholders vote to approve JetBlue's acquisition of the low-cost carrier. The revised proposal is up from $30 last offered in May, but below its initial bid of $33 per share. The New York-based carrier also is increasing the aggregate reverse break-up fee to $350 million from $200 million should the requisite antitrust approvals not be obtained.

The "valid termination" of the Frontier Airlines merger agreement is a condition to the offer, according to JetBlue. Frontier in February announced an agreement to purchase Spirit for about $2.9 billion in cash and stock. 

In early May, the Spirit board unanimously rejected JetBlue's previous proposal, citing the U.S. Department of Justice's antitrust suit against JetBlue's partnership with American Airlines, dubbed the Northeast Alliance, as a key reason why it expects a would-be acquisition of Spirit by JetBlue to fail. 

JetBlue has not agreed to end its agreement with American Airlines, as previously requested by Spirit, and noted in its latest offer Spirit board's "unwillingness to share due diligence information or negotiate in good faith."

Proxy advisory firm Glass Lewis on Thursday recommended that Spirit stockholders vote for the Frontier proposal; however, on May 31, another proxy advisory firm Institutional Shareholder Services ISS recommended Sprit shareholders reject the Frontier offer. 

Spirit is to hold a shareholder meeting on Friday, June 10, for a vote on its proposed merger with Frontier.