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Bidding War Continues with Improved JetBlue Offer for Spirit

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JetBlue Improved Offer Spirit

JetBlue Submits Improved Offer to Acquire Spirit

JetBlue is not giving up on its plans to acquire Spirit. The New York based carrier has increased its bid for the budget airline, as it tries to compete with the Frontier Airlines offer which is still favorite.

JetBlue’s new offer is a further improvement to its previous proposals, and gives Spirit stockholders more value, more regulatory protections, and the prepayment of a portion of cash consideration.

Here are the details of the new JetBlue offer:

  • Enhanced reverse break-up fee: JetBlue would provide a $350 million ($3.20 per Spirit share1) reverse break-up fee, payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons. This represents an increase of $150 million, or $1.37 per Spirit share, to the reverse break-up fee JetBlue has previously offered to pay, and is $100 million greater than the amount being offer by Frontier.
  • Accelerated prepayment of $1.50 per share: JetBlue would prepay $1.50 per share in cash (approximately $164 million) of the reverse break-up fee, structured as a cash dividend to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue.2
  • Superior, all-cash premium: JetBlue’s proposal offers Spirit stockholders aggregate consideration of $31.50 per share in cash, comprised of $30 per share in cash at the closing of the transaction and the prepayment of $1.50 per share of the reverse break-up fee.

The latest offer comes as Frontier recently updated its own proposal with a breakup fee of $250 million. Spirit rejected JetBlue’s initial $3.6 billion bid in May after agreeing to a $2.9 billion merger with Frontier earlier this year. JetBlue later launched a hostile takeover attempt, which was rejected again.

Spirit shareholders are scheduled to vote on Frontier’s new offer this Friday.

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Based in NYC. Points/miles enthusiast for years and actively writing about it for the last 6+ years at Danny the Deal Guru. I'm always looking out for deals. Making a few bucks is always nice, but the traveling is by far the best part of this business.

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