Frontier ups bid for Spirit in response to JetBlue pressure
Frontier Airlines increased its offer for Spirit Airlines on Friday, less than a week before Spirit shareholders vote on whether to approve the proposed merger between low-cost carriers.
The new agreement, which was detailed in an SEC filing late Friday, would see Spirit shareholders get a total of $4.13 in cash per share if the merger is completed, an increase of $2 from the previous offer. Spirit shareholders would additionally still receive shares of Frontier as part of the payment. Spirit said that $2.22 per share of the total cash amount would be paid before the merger closes as a dividend.
JetBlue's all-cash offer would give Spirit shareholders $33.50 per share, but no stock in the combined airline, a deal valued at about $3.6 billion. Frontier's original offer was valued at $2.9 billion, but has lost some value because of a decline in stock prices.
Frontier also increased its proposed early termination fee to $350 million, in the event that the Department of Justice rejects the merger on antitrust grounds — an increase of $100 million over the previous offer.
The new offer comes after Spirit showed signs of growing openness to JetBlue's unsolicited offer. Spirit postponed its shareholders vote from earlier this month to June 30 in order to give the board more time to consider JetBlue's offer, while the budget carrier also provided due diligence to the JetBlue team.
Spirit's board has suggested shareholders adopt the Frontier agreement, arguing that there's a greater likelihood that regulators would reject a merger with JetBlue.
"A merger with Frontier poses less regulatory risk on Spirit stockholders and increases competition in the industry for the benefit of consumers," Spirit board chairman Mac Gardner said in a statement. "The Board is confident a merger with Frontier is the most financially and strategically compelling path forward for Spirit stockholders, with more certainty and the strongest likelihood of closing."
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Earn 200K miles when you spend $30K in the first 3 months, and an additional 200K miles when you spend $150K in the first 6 monthsLIMITED-TIME OFFER: Earn up to 400K bonus milesAnnual Fee
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Why We Chose It
The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
- The Capital One Venture X business card has a very lucrative welcome offer.
- In addition, the card comes with many premium travel perks such as an annual $300 credit for bookings through Capital One Business Travel.
- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month