A new report from J.P. Morgan analyst Jamie Baker sees the likelihood of a merger between JetBlue Airways and Spirit Airlines improving. The comments come days after JetBlue improved its offer for Spirit by more than $150 million, and the latter delayed a key shareholder vote on a merger — either with Frontier Airlines or JetBlue — by three weeks to June 30.
“We believe some merger involving Spirit is a high probability outcome,” Baker wrote Thursday. “We also believe a merger outcome between Spirit and JetBlue is a growing probability and may overtake the likelihood of a Frontier deal.”
JetBlue is offering Spirit shareholders $31.50 per share that totals roughly $3.4 billion. The offer includes a $1.50 per share prepayment of a $350 million break up fee in the event U.S. regulators do not approve the deal. Frontier is offering Spirit investors the equivalent to $2.9 billion in cash and stock.
On June 6, following receipt of JetBlue’s improved offer, Frontier declined to raise its bid for Spirit, Securities & Exchange Commission filings show.