JetBlue Airways (NASDAQ:JBLU) on Monday improved its offer to buy smaller rival Spirit Airlines (NYSE:SAVE), as the battle for the low-cost carrier intensifies.
Shares of Spirit jumped 52 cents, or 2.5%, to $21.26, while those for JetBlue docked 4.5 cents to $10.43.
Under JetBlue’s new terms, Spirit shareholders will get $31.50 per share in cash, comprising $30 at deal close and prepayment of $1.50 from a raised reverse break-up fee. Its earlier offer was for $30 per share.
The move comes days before a June 10 shareholder vote on a competing offer from Frontier Group Holdings (NASDAQ:ULCC).
Spirit had rejected JetBlue’s offer last month saying it had a low likelihood of winning approval from government regulators.
On Monday, JetBlue raised its reverse break-up fee by $150 million to $350 million, which is payable to Spirit shareholders in case the deal falls through due to antitrust reasons.
Frontier had agreed to pay $250 million in break-up fees.
JetBlue has sent a letter to the Board of Directors of Spirit containing its improved proposal. In the letter, JetBlue CEO Robin Hayes states:
“Combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for crew members, and more value for stockholders.
