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JetBlue (JBLU) Boosts Proposal to Acquire Spirit Airlines
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JetBlue Airways (JBLU - Free Report) has enhanced its proposal yet again in takeover battle for Spirit Airlines (SAVE - Free Report) . JBLU revised terms of the acquisition proposal at SAVE’s request. The company is now offering $33.50 per share to Spirit Airlines’ shareholders, up from the previous proposal of $31.50. This represents a premium of 68% to Frontier Group Holdings’ (ULCC - Free Report) proposal to acquire Spirit Airlines.
JetBlue’s enhanced proposal continues to offer a reverse break-up fee of $350 million (or $3.20 per Spirit Airlines share) payable to Spirit Airlines in case the deal fails to materialize due to antitrust concerns. The company had initially offered a reverse break-up fee of $200 million. Frontier’s proposal consists of a reverse termination fee of $250 million.
Keeping up with its previous commitment, JBLU would prepay $1.50 per share in cash to Spirit Airlines’ shareholders as soon as they vote in favor of the merger deal. With this, SAVE’s shareholders will receive $33.50 per share in cash, consisting of $32 per share in cash at the time of closing of the transaction and the prepayment of $1.50 per share of the reverse break-up fee. -
Spirit Airlines confirmed the receipt of JetBlue’s updated proposal and said that the board would evaluate it. Amid the takeover tussle between JBLU and ULCC, SAVE has postponed its shareholders’ meeting to Jun 30 from Jun 10.
JetBlue’s chief executive officer, Robin Hayes, said, "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."
In February, Frontier first offered to acquire Spirit Airlines in a $2.9-billion deal. Per the terms of the merger agreement, Spirit Airlines’ shareholders will receive $25.83 per share, a premium of about 19% on the closing price of Feb 4. SAVE will own approximately 48.5% of the combined airline, while the remaining will be owned by ULCC.
In April, JetBlue began to pursue its interest in acquiring Spirit Airlines, by proposing a $3.6-billion deal to take over the latter. In the past, SAVE has twice turned down JBLU’s enhanced takeover offers citing regulatory risks.
It remains to be seen whether JetBlue’s successive enhanced proposals to acquire Spirit Airlines pays off as the latter continues merger talks with Frontier.
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JetBlue (JBLU) Boosts Proposal to Acquire Spirit Airlines
JetBlue Airways (JBLU - Free Report) has enhanced its proposal yet again in takeover battle for Spirit Airlines (SAVE - Free Report) . JBLU revised terms of the acquisition proposal at SAVE’s request. The company is now offering $33.50 per share to Spirit Airlines’ shareholders, up from the previous proposal of $31.50. This represents a premium of 68% to Frontier Group Holdings’ (ULCC - Free Report) proposal to acquire Spirit Airlines.
JetBlue’s enhanced proposal continues to offer a reverse break-up fee of $350 million (or $3.20 per Spirit Airlines share) payable to Spirit Airlines in case the deal fails to materialize due to antitrust concerns. The company had initially offered a reverse break-up fee of $200 million. Frontier’s proposal consists of a reverse termination fee of $250 million.
Keeping up with its previous commitment, JBLU would prepay $1.50 per share in cash to Spirit Airlines’ shareholders as soon as they vote in favor of the merger deal. With this, SAVE’s shareholders will receive $33.50 per share in cash, consisting of $32 per share in cash at the time of closing of the transaction and the prepayment of $1.50 per share of the reverse break-up fee.
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Spirit Airlines confirmed the receipt of JetBlue’s updated proposal and said that the board would evaluate it. Amid the takeover tussle between JBLU and ULCC, SAVE has postponed its shareholders’ meeting to Jun 30 from Jun 10.
JetBlue’s chief executive officer, Robin Hayes, said, "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."
In February, Frontier first offered to acquire Spirit Airlines in a $2.9-billion deal. Per the terms of the merger agreement, Spirit Airlines’ shareholders will receive $25.83 per share, a premium of about 19% on the closing price of Feb 4. SAVE will own approximately 48.5% of the combined airline, while the remaining will be owned by ULCC.
In April, JetBlue began to pursue its interest in acquiring Spirit Airlines, by proposing a $3.6-billion deal to take over the latter. In the past, SAVE has twice turned down JBLU’s enhanced takeover offers citing regulatory risks.
It remains to be seen whether JetBlue’s successive enhanced proposals to acquire Spirit Airlines pays off as the latter continues merger talks with Frontier.
Each of the three stocks mentioned above carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.