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Bloomberg
JetBlue Airways Corp raised its offer to purchase Spirit Airlines Inc, the latest move in a multi-billion dollar takeover contest with rival Frontier Group Holdings Inc, with both would-be suitors battling to secure a swift track to expansion as domestic travel demand surges.
New York-based JetBlue is now offering $33.50 per share, up from $31.50 on June 6, according to a statement. The company revised the terms at Spirit’s request. The new
iteration continues to include commitments from previous proposals, including a reverse break-up fee of $350 million and an accelerated prepayment of $1.50 per share.
JetBlue’s offer values Spirit at about $3.7 billion and followed Spirit’s decision to delay a shareholder vote on its pending deal with Frontier until June 30, giving directors time to hold further talks with both airlines and its own investors.
Spirit said its board will review the proposal and provide an update to investors before the June 30 vote.
At stake for JetBlue is possibly its best bet for a fast track to growth that would position it as a more formidable competitor to the four major carriers that dominate about 80% of the US market.
“After discussions with the Spirit team last week and further due diligence review, we are more convinced than ever that a JetBlue-Spirit transaction would create a true national competitor to the Big Four and deliver value to all
of our stakeholders,†JetBlue Chief Executive Officer Robin Hayes said.
The new offer also includes a stronger commitment to divest certain JetBlue and Spirit assets, though it excludes those in a JetBlue alliance with American Airlines Group Inc in the US Northeast.