JetBlue Ups Breakup Fee in Spirit Airlines Bidding War Move

JetBlue Airways is not done yet trying to acquire Spirit Airlines. With just three days until shareholders vote, the New York-based carrier has upped its offer again, raising its reverse breakup fee to $400 million to beat rival bidder Frontier Airlines.

JetBlue's latest offer — its fourth for Spirit — also includes a prepayment of $2.50 per share of the breakup fee, and a "ticking fee mechanism" where the airline would pay Spirit shareholders an additional $0.10 per share monthly from January 2023 until the deal closed, JetBlue said Monday. The ticking fee could increase JetBlue's overall offer to as much as $34.15 per share. Its last offer was for $33.50 per share plus a $350 million breakup fee.

"We’ve discussed our offer directly with Spirit shareholders and are now modifying our proposal in response to shareholders’ expressed interest, to include a monthly payment for shareholders, with the certainty of a significant cash premium at closing," JetBlue CEO Robin Hayes said Monday.

And, in a letter directly to Spirit shareholders, Hayes said the airline's board has "never negotiated with us and have now favored a transaction that better serves Frontier’s controlling shareholder than Spirit’s shareholders."

Frontier's latest offer, unveiled on June 24, included an additional $2 per share for a total of $4.13 a share, plus a $350 million reverse break up fee. The offer was valued at $2.7 billion based on closing stock prices that day.

Spirit shareholders will vote to accept or reject Frontier's offer on June 30.