The airline said in a statement released on June 20, 2022 that it has increased its cash offer to $33.50 per share, which is an increase per share of $2 from its June 6 offer and sees a stronger divestiture commitment.
In addition to the improved terms, the proposal will continue to include commitments from previous proposals that were well received by Spirit stockholders, including a $350 million reverse break-up fee, which JetBlue (JBLU) will pay to Spirit’s shareholders if a deal between the two isn’t completed for antitrust reasons. This represents an increase of $100 million, or $0.91 per Spirit share, compared to the reverse break-up fee Frontier agreed to on June 2.
“JetBlue’s (JBLU) June 20 proposal includes a significant enhancement to its prior proposals through an obligation to divest assets of JetBlue (JBLU) and Spirit up to a material adverse effect on the combined JetBlue (JBLU)-Spirit, with a limited carve-out to this divestiture obligation for actions that would be reasonably likely to materially and adversely affect the anticipated benefits under JetBlue’s (JBLU) Northeast Alliance,” JetBlue (JBLU) said in its statement.
“This commitment significantly increases the divestitures JetBlue (JBLU) would be willing to commit to making in order to obtain regulatory approval and meaningfully exceeds the divestiture commitment from Frontier,” the airline added.
“A true national competitor”
According to JetBlue (JBLU) chief executive Robin Hayes, the airline is “more convinced than ever” that the transaction between both US low-cost carriers “would create a true national competitor to the Big Four and deliver value to all of our stakeholders”.
“Our previous proposal was met with an extremely positive reaction from Spirit stockholders, and we believe they will be even more pleased with these improved terms, including additional regulatory commitments that reflect our confidence in our ability to obtain antitrust approval and are a direct result of our diligence,” Hayes continued.
“We are ready to move quickly to reach a merger agreement, bringing more value to shareholders, more competition to the industry, and more opportunities, including JetBlue’s (JBLU) incredibly strong culture and commitments to our crew members, as we welcome Spirit team members into the JetBlue (JBLU) family,” Hayes added.
The meeting, during which Spirit’s shareholders will vote for or against a merger with Frontier Group, the parent company of American ultra-low-cost carrier Frontier, was initially scheduled to take place on May 10, 2022. However, the vote was initially moved to June 10, but has been further delayed until June 30, 2022.