Frontier ups bid for Spirit in response to JetBlue pressure

Jun 24, 2022

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

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.

Want more airline-specific news? Sign up for TPG’s free new biweekly Aviation newsletter.

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.”

Featured photo by Joe Raedle/Getty Images.

Marriott Bonvoy Business® American Express® Card

Receive 1 Free Night Award every year after your Card account anniversary. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy points) at hotels participating in the Marriott Bonvoy program.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 125,000 Marriott Bonvoy Bonus Points after spending $5,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 8/31/22.
  • 6x points at hotels participating in the Marriott Bonvoy™ program.
  • 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
  • 2x points on all other eligible purchases.
  • Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
  • Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy points) at a participating hotel. Certain hotels have resort fees.
  • Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
  • Terms apply.
  • See Rates & Fees
Regular APR
17.99% - 26.99% Variable
Annual Fee
$125
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

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

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.