JetBlue’s new offer expected to heat up bidding war for Spirit Airlines
Author : Pankaj Singh | Published Date : 2022-06-07
JetBlue Airways Corporation has reportedly ramped up its bid to acquire low-cost carrier Spirit Airlines, Inc., sparking a bidding war with Frontier Group Holdings, Inc.
Spirit had dismissed JetBlue's offer earlier this month, claiming that it had little probability of receiving approval from government regulators, spurring the New York-based carrier to initiate an aggressive takeover bid.
Sources claimed that JetBlue has elevated its reverse break-up fee from USD 200 million to USD 350 million, asserting that should the merger agreement with Frontier fail, Spirit shareholders will be paid that amount given the antitrust reasons.
As per the amended terms, investors will receive USD 31.50 per share in cash, consisting of USD 30 at the time of the deal's closing, and a prepayment of the remaining USD 1.50 from the improved reverse break-up fee. This move follows Frontier’s decision to pay Spirit a USD 250 million break-up fee.
While the Florida-based airline has stated that it will assess JetBlue's new offer and react accordingly, it has also asked its shareholders not to take further action. The final decision will be revealed at the shareholders' vote, which is scheduled to happen on Friday, June 10th.
The race between the two carriers exemplifies the difficulties that they face in diversifying their domestic reach in the face of relentless labor and aircraft scarcities. People close to the situation have mentioned that while Spirit remains committed to the Frontier agreement, it is likely that they may be reconsidering its position considering JetBlue's appealing offers.
Spirit's deal with Frontier claims that, in addition to saving current jobs, it will create 10,000 new jobs by 2026. Even JetBlue has promised more opportunities, higher pay, no furloughs, and career advancement for all Spirit employees.
It is worth noting that either of the two transactions will result in the formation of the fifth-largest airline in the United States.
Source credits –
About Author
Pankaj Singh . .
Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605
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