JetBlue Airways (NASDAQ:JBLU) again increased its offer for Spirit Airlines (NYSE:SAVE) with a shareholder vote for the discounter’s deal to merge with Frontier Airlines (NASDAQ: ULCC) just days away.
Frontier sweetened its offer on Friday. Spirit’s CEO Ted Christie told the media then that Spirit’s board still found the deal to combine with fellow budget airline Frontier a superior option than going with JetBlue.
Spirit shareholders are set to vote on the Frontier cash-and-stock deal on Thursday; Spirit postponed the vote earlier this month to continue deal talks with both airlines.
Either combination would create the fifth-largest U.S. carrier. The heated bidding war underscores how both JetBlue and Frontier view Spirit as key to their future growth plans at a time when planes and pilots are in short supply.
Spirit had argued that it didn’t think a JetBlue deal would pass muster with regulators, particularly because of its alliance with American Airlines (NASDAQ:AAL) in the Northeast.
JetBlue’s new offer raises the reverse break-up fee to $400 million from $350 million if regulators don’t approve the deal and includes a dividend to Spirit shareholders of $2.50 a share, up from a previous offer of $1.50.
It also includes a “ticking fee,” that would pay shareholders 10 cents a share each month from January 2023 through the completion or termination of the deal.
Frontier on Friday had increased the cash portion of its bid by $2 a share to $4.13 and raised its reverse break-up fee proposal to $350 million, matching JetBlue’s earlier offer.
JBLU shares went airborne 25 cents to $9.01, SAVE shares jumped 88 cents, or 3.9%, to $23.45. Shares in ULCC, meanwhile, began Tuesday ahead 29 cents, or 3.1%, to $9.65.
