CHICAGO, June 27 (Reuters) - JetBlue Airways Corp
on Monday ratcheted up its bidding war with Frontier Group
Holdings for Spirit Airlines Inc as the race
for the ultra-low-cost carrier enters the final stretch.
Both bidders see Spirit as an opportunity to expand their
domestic footprints at a time when the U.S. airline industry is
dogged by labor and aircraft shortages. Either of the deals
would create the fifth-largest U.S. airline.
Under the new offer, JetBlue offered a "ticking fee," which
would give Spirit shareholders a monthly prepayment of 10 cents
per share between January 2023 and the closing of the deal,
raising the overall value of the deal to $34.15 per share.
The New York-based carrier also increased the breakup fee to
Spirit by $50 million for a total of $400 million if the deal
fails to get regulatory approval. It will also prepay $2.50 per
share as a cash dividend to Spirit stockholders following
approval of the transaction.
The latest offer came after Frontier last Friday raised its
bid for Spirit.
Frontier's revised offer persuaded shareholder advisory firm
Institutional Shareholder Services (ISS) to reverse its position
and recommend Spirit shareholders back a merger with the
Denver-based budget carrier. Glass Lewis, another proxy firm,
has also recommended the Frontier deal.
Spirit shareholders are due to vote on the merger deal with
Frontier on June 30.
Frontier Chief Executive Barry Biffle told Reuters on Monday
the company's revised offer for Spirit will be enough to secure
a merger deal with the ultra-low-cost carrier.
"We're really excited about it and getting good feedback,"
JetBlue, however, is not ready to give up. On Monday, it
again urged Spirit shareholders to vote against the Frontier
deal, saying its proposal offers them "more value and
(Reporting by Rajesh Kumar Singh; Editing by Leslie Adler and