Spirit Airlines Agrees To Frontier's Revised Offer, Says JetBlue Offer Not Superior

(RTTNews) - Spirit Airlines, Inc. (SAVE) on Monday received an open letter from Frontier Group Holdings, Inc. (ULCC), parent company of Frontier Airlines, Inc., noting that its latest takeover offer gives Spirit stockholders the opportunity to realize significant upside in excess of $50 per share, delivering superior value compared to JetBlue's proposal.

The airline last Friday agreed to a sweetened offer by Frontier that includes more cash and increased reverse termination fee, after determining that JetBlue's revised offer is not a superior proposal.

Shares of Spirit Airlines were losing around 8 percent in Monday's pre-markect trading on the NYSE.

In its letter, Frontier said the agreed combination's value is well in excess of JetBlue's illusory proposal, which lacks any realistic likelihood of obtaining regulatory approval.

The company also noted that proxy advisory firms ISS and Glass Lewis support Frontier and Spirit transaction and have recommended that Spirit stockholders vote to approve the transaction at the upcoming Spirit Special Meeting of Stockholders on June 30.

Based on the improved terms offered by Frontier, the Spirit Airlines Board reiterated its recommendation that Spirit stockholders vote FOR the merger agreement with Frontier.

Under the revised terms, Frontier will increase the per-share cash consideration payable to Spirit stockholders to $4.13 in cash. This is in addition to the per-share stock consideration of 1.9126 shares of Frontier that Frontier previously agreed to pay Spirit stockholders.

Frontier has also agreed that $2.22 per share will be prepaid to Spirit stockholders on a record date to be determined as a cash dividend. The $2.22 per share dividend will be funded by Frontier.

Frontier will increase its reverse termination fee to $350 million to Spirit in the unlikely event the combination is not consummated for antitrust reasons.

The company further noted that the decision on JetBlue's offer was taken after extensive discussions with the airline, including negotiating further the terms of JetBlue's draft merger agreement and providing extensive additional due diligence to JetBlue and its advisors

The company urged stockholders to vote FOR the merger agreement with Frontier on the WHITE proxy card prior to the June 30 Special Meeting.

In pre-market activity on the NYSE, Spirit Airlines shares were trading at $22.65, down 7.63 percent.