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Frontier sweetens offer for Spirit merger as shareholder vote looms

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A Frontier Airlines plane near a Spirit Airlines plane on the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Frontier Airlines has sweetened its offer to mix with fellow budget carrier Spirit, lower than per week before Spirit shareholders are set to vote on the deal.

The brand new offer for $4.13 per share, $2 per share higher than Frontier’s original cash-and-stock bid, comes after JetBlue Airways repeatedly upped its own offer to purchase Spirit outright in an all-cash deal.

The battle for Miramar, Florida-based Spirit has heated up in recent weeks. JetBlue has argued that its deal would help it higher compete against large carriers and expand quickly at a time when latest planes and pilots are briefly supply.

JetBlue would take over Spirit, while a Frontier-Spirit combination would create a reduction carrier behemoth. Either transaction would create the country’s fifth-largest airline.

Spirit shareholders are set to vote on the Frontier deal on Thursday.

Spirit CEO Ted Christie told CNBC the airline’s board has evaluated JetBlue’s latest offer and still has doubts that regulators would approve the deal. The board, he said, still views a Frontier tie-up as “a superior transaction.”

“We are going to more thoroughly review and assess the revised terms of the Frontier-Spirit merger agreement, and we intend to proceed our ‘vote no’ campaign against the inferior Frontier transaction on the special meeting,” JetBlue said in an announcement Friday.

The brand new offer, which was announced late Friday, also increases a proposed reverse break-up fee by $100 million to $350 million, within the event the deal doesn’t get approved by regulators. That matches the reverse break-up fee JetBlue has offered. Frontier’s latest offer features a pre-payable amount of $2.22 to Spirit shareholders.

Christie said the board still had regulatory concerns about JetBlue’s Northeast Alliance with American Airlines, which allows the carriers to coordinate on flights and book passengers on one another’s planes. The Department of Justice last 12 months sued to undo that partnership.

Shares of all three airlines were little modified in after-hours trading Friday.

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