JetBlue Airways threw another $150 million into its high-stakes bid to win control of Spirit Airlines, seeking to persuade shareholders to reject a merger with rival Frontier Airlines.
JetBlue’s sweetened proposal comes as Spirit investors are scheduled to vote Friday on whether to merge with Frontier. JetBlue is urging Spirit shareholders to reject the deal while pressuring the Spirit board to negotiate with JetBlue.The increase in the reverse breakup fee is intended to offer investors an insurance policy if the JetBlue deal can’t pass regulatory scrutiny.
ISS released a new analysis late Monday, noting Frontier’s inclusion of a $250 million breakup fee and JetBlue’s revised proposal increasing its proposed payout to $350 million. Even so, it said its initial recommendation, that Spirit investors vote against the merger with Frontier, still stands. In a letter to his employees, Spirit chief executive Ted Christie acknowledged receipt of the revised proposal and said the board would work with its financial and legal advisers to review the offer.“I know you likely have questions, but unfortunately, I don’t have many answers to share with you just yet,” Christie wrote. “I will be back to you with more information as soon as we have it.”
In May, the Association of Flight Attendants-CWA, which represents flight attendants at Frontier and Spirit, announced it supported a merger between the two airlines. The Transport Workers Union, which represents JetBlue flight attendants, announced last month that it is opposed to a Spirit merger.
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