- JetBlue has proposed a new offer in its bid to acquire budget airline Spirit.
- The offer includes a breakup fee worth $150 million more than it originally proposed.
- It is the latest development in the bidding war between JetBlue and Frontier over Spirit.
JetBlue has increased its bid for the budget airline Spirit, intensifying competition with Frontier Airlines ahead of the shareholder vote over the merger.
JetBlue's enhanced offer, which it announced on Monday, includes a reverse breakup fee of $350 million in the event that the transaction does not go through. The figure is $150 million more than the break-up fee the airline originally proposed.
"The key features of our Improved Proposal – the up-front cash payment and increased reverse break-up fee – reflect the seriousness of our commitment and underscore our confidence in completing this transaction," JetBlue CEO Robin Hayes said in a company press release.
"Additionally, given the similar regulatory risks of the two transactions and the increased reverse break-up fee we are prepared to provide, we believe our Improved Proposal remains a Superior Proposal by any measure," the statement added.
Frontier, Spirit, JetBlue airlines did not immediately respond to Insider's request for comment made outside of normal working hours.
JetBlue also said that if a vote combining the airlines passed, it would prepay $1.50 per share in cash of the reverse break-up fee as a dividend to Spirit stockholders. Under the new proposal, JetBlue would offer Spirit stockholders "aggregate consideration of $31.50 per share in cash."
The increased offer comes as part of the latest development in the airline's bidding war with Frontier to acquire Spirit. Frontier recently proposed a breakup fee of $250 million as part of its offer, multiple outlets reported.
Spirit rejected JetBlue's initial $3.6 billion bid in May after agreeing to a $2.9 billion merger with Frontier in February. JetBlue later launched a hostile takeover attempt for Spirit, which the budget airline rejected. Spirit cited concerns over getting regulatory approval.
On Friday, Spirit shareholders are scheduled to vote on Frontier's offer. Spirit said on Monday that its board will "pursue the course of action it determines to be in the best interests of Spirit and its stockholders" in light of JetBlue's updated offer.