JetBlue raises Spirit offer again as shareholder vote nears

JetBlue Airways Corp. raised its offer to purchase Spirit Airlines Inc., the latest move in a multi-billion dollar takeover contest with rival Frontier Group Holdings Inc., with both would-be suitors battling to secure a swift track to expansion as domestic travel demand surges.

New York-based JetBlue is now offering $33.50 per share, up from $31.50 on June 6, according to a statement Monday. The company revised the terms at Spirit’s request. The new iteration continues to include commitments from previous proposals, including a reverse break-up fee of $350 million and an accelerated prepayment of $1.50 per share.

JetBlue’s offer values Spirit at about $3.7 billion and followed Spirit’s decision to delay a shareholder vote on its pending deal with Frontier until June 30, giving directors time to hold further talks with both airlines and its own investors.

Spirit said in a statement its board will review the proposal and provide an update to investors before the June 30 vote.

At stake for JetBlue is possibly its best bet for a fast track to growth that would position it as a more formidable competitor to the four major carriers that dominate about 80% of the US market.

“After discussions with the Spirit team last week and further due diligence review, we are more convinced than ever that a JetBlue-Spirit transaction would create a true national competitor to the Big Four and deliver value to all of our stakeholders,” JetBlue Chief Executive Officer Robin Hayes said.

The new offer also includes a stronger commitment to divest certain JetBlue and Spirit assets, though it excludes those in a JetBlue alliance with American Airlines Group Inc. in the US Northeast. Spirit rejected earlier JetBlue offers saying the combination would not be approved by US antitrust enforcers.