JetBlue boosts breakup fee, adds cash payment in bid for Spirit

JetBlue Airways improved its offer for Spirit Airlines, boosting a breakup provision to $350m and adding an upfront cash payment just days before shareholders will vote on a pending buyout agreement with Frontier Group Holdings. The revised offer increases JetBlue’s reverse breakup fee by $150m and provides for about $164m payable as a cash dividend “promptly following” a vote approving a combination of the carriers, the airline said in a statement Monday. The update comes after Frontier sweetened its own agreement by adding a key $250m fee payable to Spirit if their accord breaks up on antitrust grounds. JetBlue is aiming to build more support among Spirit shareholders for its higher, all-cash offer ahead of a June 10 vote. It needs them to vote against Frontier’s stock-and-cash deal, initially valued at $2.9 billion, to preserve its best chance for a quick infusion of growth that will help it compete against larger US carriers. Spirit rejected JetBlue’s initial $3.6b offer, prompting a subsequent $3.3b hostile tender bid. Spirit shareholders are faced with conflicting recommendations from prominent shareholder advisory firms. <br/>