Spirit Airlines, the ultra low cost airline that many (ourselves included) use to travel to Orlando, is in the middle of a bidding war between JetBlue and Frontier.
JetBlue increased its reverse break-up fee by $150 million to $350 million, which is payable to Spirit shareholders in case the deal falls through due to antitrust reasons.
The revised offer comes days after Frontier agreed to pay Spirit a break-up fee of $250 million. read more
Under JetBlue’s revised terms, Spirit shareholders would receive $31.50 per share in cash, comprising $30 at deal close and prepayment of $1.50 from a raised reverse break-up fee soon after Spirit shareholders vote to approve a deal.
Spirit’s shares were up 6.1% in mid-day trade.
Its shareholders are scheduled to vote on Friday on the company’s merger agreement with Frontier. However, Spirit said its board will evaluate JetBlue’s new offer and respond in due course. It asked the company’s shareholders not to take any action at this stage.
Spirit rejected JetBlue’s offer last month, which prompted a hostile takeover by Frontier. Whoever ultimately wins, the acquisition of Spirit will create the fifth-largest U.S. airline.
(And you can probably expect prices to increase as well!)
[Source: Reuters]
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