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• Airline offered to pay $30 at deal close, and $1.50 prepayment after Spirit shareholders vote to approve the deal
• JetBlue did not offer to unwind its Northeast Alliance partnership with American Airlines
JetBlue Airways Corp (NASDAQ: JBLU) on Monday sweetened its acquisition offer for Spirit Airlines Inc (NYSE: SAVE) to outstrip competition in the race to buy the low-cost carrier.
Under a revised term, JetBlue said Spirit shareholders would receive $31.50 per share in cash, among which $30 at deal close and $1.50 prepayment after Spirit shareholders vote to approve the deal.
JetBlue last month said it would pay $30 per share for the hostile takeover bid after initially offering $33 per share.
Shares of Spirit jumped 7% in New York.
The move comes days ahead of the shareholder vote on a competing offer from Frontier Group Holdings Inc (NASDAQ: ULCC), which was scheduled for next Friday.
Last week, proxy advisory firm Glass Lewis recommended Spirit investors to vote for the $2.9 billion deal with Frontier Group after another advisory firm Institutional Shareholder Services Inc (ISS), advised to vote against it.
Antitrust approval
Spirit had rejected JetBlue's offer last month, saying it had a low likelihood of winning government approval.
On Monday, JetBlue raised its reverse break-up fee by $150 million to $350 million, which will be payable to Spirit shareholders if the deal falls through.
In the latest revised offer, JetBlue did not offer to unwind its "Northeast Alliance" (NEA) partnership with American Airlines (NASDAQ: AAL) - a critical point in its deal talks with Spirit.
The budget airline carrier has been reluctant to consider any offer from JetBlue due to antitrust concerns, as NEA is already under the magnifying glass of the Justice Department, which sued JetBlue in September to unwind the partnership.
Picture Credit: CNN
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