JetBlue Airways still hasn’t given up on attempts to take over competitor Spirit Airlines. After their initial offer fell short, JetBlue made an improved offer on Monday and is now willing to pay $31.50 per share.
The new terms would see shareholders getting $31.50 in cash, including $30 at deal close and a prepayment of $1.50. The latter would come from a raised reverse break-up fee, which was increased from $150 million to $350 million according to the latest offer.
JetBlue’s last-minute attempt comes after Frontier Group Holdings Inc. emerged as a favorite to take Spirit under its wing. Frontier’s offer includes $250 million in reverse break-up fee. It is subject to vote by Spirit’s shareholders on Friday and has already been endorsed by advisory firm Glass Lewis.
JetBlue always offered better financial terms, surpassing $3 billion both times. On the other hand, Frontier offered around $2.8 billion, but Glass Lewis believes they have much an easier path to sealing the deal and avoiding antitrust regulations. However, the firm will now have to revise its opinion due to JetBlue’s improved offer.
It remains to be seen how Friday’s vote unfolds, but it shouldn’t be surprising if the pressure of big investors causes shareholders to walk away from Frontier and turn to JetBlue.
