JetBlue (Again) Raises Offer to Acquire Spirit Airlinees

JetBlue Airways, which has been in an intense bidding war, competing with Frontier Airlines, to acquire Spirit Airlines once again raised its offer in an attempt to outmaneuver Frontier.
The New York-based carrier proposed on Monday a $400 million breakup fee, payable to Spirit if regulators blocked the merger.  JetBlue had previously said it would pay $350 million in such an instance.  It also said it would prepay $1 more per share once shareholders of Spirit approve the deal, bringing the total to $2.50,
Spirit, a budget carrier that was founded in 1983, said it would stick with the offer from Frontier to be acquired.  Last week Frontier added $2 per share to its previous offer, boosting it to $4.13 in cash plus 1.9126 Frontier shares for each Spirit share. That deal was later endorsed by Institutional Shareholder Services, a proxy advisory firm.
Founded in 1983 as Charter One Airlines, Spirit indicated it was skeptical that antitrust regulators would sign off on a deal with JetBlue, citing the fact that the Department of Justice is already challenging that airline’s “Northeast Alliance” partnership with American Airlines, the world’s largest carrier.
For its part, JetBlue has said that it is confident that the deal would gain approval without having to exit the Northeast Alliance and it said it would divest assets to satisfy regulatory concerns – and it continues to maintain its deal is better for Spirit shareholders.
“The Spirit Board is now claiming they have served their shareholders by accepting a revised Frontier proposal, an act which does not change the fundamental superiority of our transaction,” JetBlue said.
(Photo: Accura Media Group)