JetBlue raises Spirit offer again as shareholder vote nears

JETBLUE Airways raised its offer to purchase Spirit Airlines, the latest move in a multi-billion dollar takeover contest with rival Frontier Group Holdings, with both would-be suitors battling to secure a swift track to expansion as domestic travel demand surges.

New York-based JetBlue is now offering US$33.50 per share, up from US$31.50 on Jun 6, according to a statement Monday (Jun 20). The company revised the terms at Spirit's request. The new iteration continues to include commitments from previous proposals, including a reverse break-up fee of US$350 million and an accelerated prepayment of US$1.50 per share.

JetBlue's offer values Spirit at about US$3.7 billion and followed Spirit's decision to delay a shareholder vote on its pending deal with Frontier until Jun 30, giving directors time to hold further talks with both airlines and its own investors.

A spokesperson for Spirit was unable to provide immediate comment.

At stake for JetBlue is possibly its best bet for a fast track to growth that would position it as a more formidable competitor to the 4 major carriers that dominate about 80 per cent of the US market.

"After discussions with the Spirit team last week and further due diligence review, we are more convinced than ever that a JetBlue-Spirit transaction would create a true national competitor to the Big Four and deliver value to all of our stakeholders," JetBlue chief executive officer Robin Hayes said.

The new offer also includes a stronger commitment to divest certain JetBlue and Spirit assets, though it excludes those in a JetBlue alliance with American Airlines Group in the US Northeast. Spirit rejected earlier JetBlue offers saying the combination would not be approved by US antitrust enforcers. BLOOMBERG



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