Frontier sweetens offer to buy Spirit Airlines ahead of shareholder vote

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Spirit Airlines (NYSE:SAVE) said Friday Frontier (ULCC) raised its per-share cash offer to buy the airline by $2 to $4.13/share ahead of shareholders voting on the proposal next week.

This implies the pro forma value to SAVE stockholders by 2024 could exceed $50/share, more than double its last close of $24.52.

This is in addition to the per-share stock consideration of 1.9126 ULCC shares that it earlier agreed to pay SAVE stockholders.

ULCC will also prepay $2.22/share to SAVE stockholders as a cash dividend once the deal is approved by the stockholders.

ULCC also increased the reverse termination fee it will pay SAVE to $350M from the earlier $250M if the merger is not completed for antitrust reasons.

As per the amended offer, ULCC will name an additional director of the combined firm and the number of directors to be named by SAVE will decrease by one.

SAVE said the ULLCC deal is the “most financially and strategically compelling path forward for Spirit stockholders and has a greater likelihood of closing”.

After reviewing JetBlue’s (JBLU) latest revised offer, SAVE determined that it is not a superior proposal and continues to recommend stockholders vote for the merger with ULCC.

SAVE’s special shareholder meeting to vote on the offer is scheduled for Jun. 30.

Shares of SAVE were largely unchanged postmarket after the announcement, while ULCC stock inched 1.9% higher.

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