JetBlue Modifies Proposal To Acquire Spirit Airlines

JetBlue Airways Corp.(JBLU) said Monday that it has modified its proposal to acquire Spirit Airlines Inc. (SAVE) and issued an open letter detailing the benefits of its decisively superior proposal.

JetBlue said it urged Spirit shareholders not to be misled by Spirit Board. The shareholders can protect their ability to receive JetBlue's offer by voting 'No' at the Spirit special meeting on 30th June.

JetBlue's new offer raises the reverse break-up fee to $400 million from $350 million if regulators don't approve the transaction. The new offer includes a dividend to Spirit shareholders of $2.50 per share, up from a previous offer of $1.50 per share .
The new offer also includes a "ticking fee" that would provide shareholders with a monthly prepayment of $0.10 per share between January 2023 and the consummation or termination of the transaction.

It represents an estimated aggregate ticking fee of up to $1.80 per share, of which the first $1.15 per share in payments will offset the reverse break-up fee or the merger consideration. Any payments in excess of the $1.15 per share will be incremental to the total purchase price of $33.50 or the reverse break-up fee. The increases the total transaction consideration to up to $34.15 per share in the event the transaction is consummated and total downside protection to $4.30 per share, or approximately $470 million in the aggregate, in the event the transaction is terminated.

Earlier today, Spirit Airlines said it received an open letter from Frontier Group Holdings Inc. (ULCC), parent company of Frontier Airlines Inc., noting that its latest takeover offer gives Spirit stockholders the opportunity to realize significant upside in excess of $50 per share, delivering superior value compared to JetBlue's proposal.

Spirit Airlines last Friday agreed to a sweetened offer by Frontier that includes more cash and increased reverse termination fee, after determining that JetBlue's revised offer is not a superior proposal.

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