Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Merger Agreement
On June 24, 2022, Spirit Airlines, Inc., a Delaware corporation ("Spirit"),
Frontier Group Holdings, Inc., a Delaware corporation ("Frontier"), and Top Gun
Acquisition Corp., a Delaware corporation and a direct, wholly owned subsidiary
of Frontier ( "Merger Sub"), entered into Amendment No. 2 (the "Second
Amendment") to the Agreement and Plan of Merger, dated as of February 5, 2022
(as previously amended, the "Merger Agreement"), by and among Spirit, Frontier
and Merger Sub, pursuant to which and subject to the terms and conditions
therein, Merger Sub will merge with and into Spirit, with Spirit continuing as
the surviving entity (the "Merger").
The Second Amendment amends the Merger Agreement to increase the amount of the
cash consideration payable to Spirit stockholders by an additional $2.00 per
share, for an aggregate cash amount, without interest, equal to $4.13 per share
of Spirit common stock, minus, to the extent paid or payable, the $2.22 per
share dividend described in the following paragraph (the "Per Share Cash
Consideration").
The Second Amendment also provides that, following a Spirit stockholder vote in
favor of the Merger Agreement, a portion of the cash consideration will be paid
in advance in the form of a cash dividend to Spirit stockholders as of a record
date to be determined (the "Prepayment Dividend") equal to $2.22 per share of
Spirit common stock (the "Prepayment Dividend Amount") on October 3, 2022, or
any other date determined by Spirit and consistent with applicable law (the
"Dividend Payment Date"). Frontier will make a non-interest bearing loan to
Spirit in an amount equal to $241,100,000 in connection with the dividend. In
the event that the Merger Agreement is terminated and the reverse termination
fee is payable, the amount of this loan would be offset against the reverse
termination fee owed by Frontier to Spirit.
The Second Amendment also provides that outstanding Spirit restricted stock
units (including Spirit performance market stock units) and Spirit performance
share awards granted in fiscal year 2022 will be converted into the right to
receive a Frontier restricted stock unit award and an amount of cash equal to
the sum of (x) the Per Share Cash Consideration and (y) the Prepayment Dividend
Amount, solely to the extent the Prepayment Dividend has been paid or is payable
to Spirit stockholders and no adjustment or payment has been made in respect of
the related Spirit equity awards prior to the closing under the Spirit equity
award plan to reflect the Prepayment Dividend. Further, Spirit performance share
awards granted prior to fiscal year 2022 will entitle each holder to receive the
number of shares of Spirit common stock that are earned based on target
performance as of immediately prior to the closing, pro-rated based on the
number of whole months elapsed from the first day of the applicable performance
period until the closing date, with any such shares of Spirit common stock so
delivered converted into the right to receive an amount of cash equal to the sum
of (x) the Per Share Cash Consideration and (y) the Prepayment Dividend Amount,
solely to the extent the Prepayment Dividend has been paid or is payable to
Spirit stockholders and no adjustment or payment has been made in respect of the
related Spirit performance share award prior to the closing under the Spirit
equity award plan to reflect the Prepayment Dividend. Further, any outstanding
Spirit restricted stock units (including performance market stock units), Spirit
performance share awards granted prior to fiscal year 2022 or Spirit performance
share awards granted in fiscal year 2022 that vest during the period commencing
on the Dividend Payment Date and ending on the day immediately prior to the
closing date shall receive an amount of cash equal to the Prepayment Dividend
Amount upon the vesting of such equity awards, provided that no adjustment or
payment has been made in respect of the related Spirit equity awards prior to
the closing under the Spirit equity award plan to reflect the Prepayment
Dividend.
The Second Amendment also increases the reverse termination fee payable by
Frontier to $350,000,000.
The Second Amendment also increases the number of board seats of the combined
company to be determined by the board of directors of Frontier by one and
decreases the number of board seats of the combined company to be determined by
the board of directors of Spirit by one.
Except as modified by the Second Amendment, the terms of the Merger Agreement in
the form filed by Spirit as Exhibit 2.1 to the Current Report on Form 8-K filed
by Spirit on February 7, 2022 with the U.S. Securities and Exchange Commission
("SEC"), as amended by the Amendment to the Agreement and Plan of Merger, dated
June 2, 2022, by and among Spirit, Frontier and Merger Sub, are unchanged.
The foregoing description of the Second Amendment does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Second Amendment, which is attached hereto as Exhibit 2.1 and is incorporated by
reference herein.
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Additional Information About the JetBlue Tender Offer
Spirit has filed a solicitation/recommendation statement with respect to the
tender offer with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO THE TENDER OFFER AND OTHER
RELEVANT DOCUMENTS THAT ARE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER OFFER. You will
be able to obtain free copies of the solicitation/recommendation statement with
respect to the tender offer and other documents filed with the SEC by Spirit
through the website maintained by the SEC at www.sec.gov. In addition, investors
and stockholders will be able to obtain free copies of the documents filed with
the SEC by Spirit on Spirit's Investor Relations website at
https://ir.spirit.com.
No Offer or Solicitation
This communication is for informational purposes only and is not intended to and
does not constitute an offer to sell, or the solicitation of an offer to
subscribe for or buy, or a solicitation of any vote or approval in any
jurisdiction, nor shall there be any sale, issuance or transfer of securities in
any jurisdiction in which such offer, sale or solicitation would be unlawful,
prior to registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended, and otherwise in accordance with applicable law.
Important Additional Information Will be Filed with the SEC
Frontier has filed with the SEC a Registration Statement on Form S-4 in
connection with the proposed transaction, that included a definitive Information
Statement/Prospectus of Frontier and a definitive Proxy Statement of Spirit. The
Form S-4 was declared effective on May 11, 2022 and the prospectus/proxy
statement was first mailed to Spirit stockholders on May 11, 2022. Frontier and
Spirit also plan to file other relevant documents with the SEC regarding the
proposed transaction. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT/ INFORMATION STATEMENT/ PROSPECTUS/ PROXY STATEMENT AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED BY FRONTIER OR SPIRIT WITH THE SEC IN
THEIR ENTIRETY CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT FRONTIER, SPIRIT, THE PROPOSED TRANSACTIONS AND
RELATED MATTERS. Investors and stockholders are able to obtain free copies of
the Registration Statement and the definitive Information Statement/Proxy
Statement/Prospectus and other documents filed with the SEC by Frontier and
Spirit through the website maintained by the SEC at www.sec.gov. In addition,
investors and stockholders will be able to obtain free copies of the information
statement and the proxy statement and other documents filed with the SEC by
Frontier and Spirit on Frontier's Investor Relations website at
https://ir.flyfrontier.com and on Spirit's Investor Relations website at
https://ir.spirit.com.
Participants in the Solicitation
Frontier and Spirit, and certain of their respective directors and executive
officers, may be deemed to be participants in the solicitation of proxies in
respect of the proposed transactions contemplated by the Merger Agreement.
Information regarding Frontier's directors and executive officers is contained
in Frontier's definitive proxy statement, which was filed with the SEC on April
13, 2022. Information regarding Spirit's directors and executive officers is
contained in Spirit's definitive proxy statement, which was filed with the SEC
on March 30, 2022.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this communication, including statements concerning
Frontier, Spirit, JetBlue, the proposed transactions and other matters, should
be considered forward-looking within the meaning of the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
based on Frontier's, Spirit's and JetBlue's current expectations and beliefs
with respect to certain current and future events and anticipated financial and
operating performance. Such forward-looking statements are and will be subject
to many risks and uncertainties relating to Frontier's, Spirit's and JetBlue's
operations and business environment that may cause actual results to differ
materially from any future results expressed or implied in such forward looking
statements. Words such as "expects," "will," "plans," "intends," "anticipates,"
"indicates," "remains," "believes," "estimates," "forecast," "guidance,"
"outlook," "goals," "targets" and other similar expressions are intended to
identify forward-looking statements. Additionally, forward-looking statements
include statements that do not relate solely to historical facts, such as
statements which identify uncertainties or trends, discuss the possible future
effects of current known trends or uncertainties, or which indicate that the
future effects of known trends or uncertainties cannot be predicted, guaranteed,
or assured. All forward-looking statements in this communication are based upon
information available to Frontier and Spirit on the date of this communication.
Frontier and Spirit undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events, changed circumstances, or otherwise, except as required by applicable
law. All written and oral forward-looking statements concerning the Frontier
merger or other matters addressed in this
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communication and attributable to Frontier, Spirit, JetBlue or any person acting
on their behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this communication.
Actual results could differ materially from these forward-looking statements due
to numerous factors including, without limitation, the following: the occurrence
of any event, change or other circumstances that could give rise to the right of
one or both of the parties to terminate the Merger Agreement; failure to obtain
applicable regulatory or Spirit stockholder approval in a timely manner or
otherwise and the potential financial consequences thereof; failure to satisfy
other closing conditions to the proposed transactions; failure of the parties to
consummate the transaction; risks that the new businesses will not be integrated
successfully or that the combined companies will not realize estimated cost
savings, value of certain tax assets, synergies and growth, or that such
benefits may take longer to realize than expected; failure to realize
anticipated benefits of the combined operations; risks relating to unanticipated
costs of integration; demand for the combined company's services; the growth,
change and competitive landscape of the markets in which the combined company
participates; expected seasonality trends; diversion of managements' attention
from ongoing business operations and opportunities; potential adverse reactions
or changes to business or employee relationships, including those resulting from
the announcement or completion of the transaction; risks related to investor and
rating agency perceptions of each of the parties and their respective business,
operations, financial condition and the industry in which they operate; risks
related to the potential impact of general economic, political and market
factors on the companies or the proposed transaction; that Frontier's cash and
cash equivalents balances, together with the availability under certain credit
facilities made available to Frontier and certain of its subsidiaries under its
existing credit agreements, will be sufficient to fund Frontier's operations
including capital expenditures over the next 12 months; Frontier's expectation
that based on the information presently known to management, the potential
liability related to Frontier's current litigation will not have a material
adverse effect on its financial condition, cash flows or results of operations;
that the COVID-19 pandemic will continue to impact the businesses of the
companies; ongoing and increase in costs related to IT network security; the
outcome of any discussions between JetBlue and Spirit with respect to a possible
transaction, including the possibility that the parties will not agree to pursue
a business combination transaction or that the terms of any such transaction
will be materially different from those described herein; the conditions to the
completion of the possible transaction, including the receipt of any required
stockholder and regulatory approvals and, in particular, the companies'
expectation as to the likelihood of receipt of antitrust approvals; JetBlue's
ability to finance the possible transaction and the indebtedness JetBlue expects
to incur in connection with the possible transaction; the possibility that
JetBlue may be unable to achieve expected synergies and operating efficiencies
within the expected timeframes or at all and to successfully integrate Spirit's
operations with those of JetBlue, and the possibility that such integration may
be more difficult, time-consuming or costly than expected or that operating
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
Number
Amendment No. 2 to Agreement and Plan of Merger, dated June 24, 2022, by
2.1 and among Spirit Airlines, Inc., Frontier Group Holdings, Inc. and Top Gun
Acquisition Corp.
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