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Frontier ups bid for Spirit in response to JetBlue pressure

June 24, 2022
2 min read
spirit and frontier planes
Frontier ups bid for Spirit in response to JetBlue pressure
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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.

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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.

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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."

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
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  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
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Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023