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Frontier offers $ 250 million reverse breakage fee if Spirit merger is blocked

A Frontier Airlines plane next to a Spirit Airlines plane at Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Frontier Airlines said on Thursday it would pay Spirit Airlines $ 250 million in reverse fees if regulators do not approve the planned combination of the two discount carriers for antitrust reasons to persuade investors to approve the deal next week. as rival JetBlue Airways Spirit tries to buy it directly.

“The combination of a higher reverse termination rate and a much higher probability of closing on a Frontier merger gives Spirit shareholders greater regulatory protection than JetBlue’s proposed transactions,” said Mac Gardner, President of Spirit. in a note.

JetBlue, New York, offered $ 33 billion, or $ 3.6 billion in cash, to Spirit in April, in addition to the $ 2.9 billion in cash and stock deal announced by Spirit and Frontier in February.

Spirit’s board rejected JetBlu’s progress, and JetBlue made a $ 30 bid last month for each share and asked Spirit shareholders to vote against the deal.

Spirit said the deal with JetBlu was unlikely to be approved by regulators. JetBlue’s bid includes a $ 200 million reverse breach fee if regulators do not approve of the purchase.

On Tuesday, the proxy consulting firm Institutional Shareholder Services advised Spirit shareholders to vote against the Frontier deal, raising concerns that there would be no reverse termination fees.

“The Spirit’s Board only returned to the Frontier under pressure when it became increasingly clear that their shareholders would decisively reject the Spirit Board’s process error and Frontier’s low transaction,” JetBlue said on Thursday.

“It is simply a matter of recognizing that the regulatory profile profiles and deadlines of the two agreements are similar in the event of a possible failure in the event of a bankruptcy,” he added.

Spirit’s shareholders ’meeting will be held on June 10th.

Frontier offers $ 250 million reverse breakage fee if Spirit merger is blocked

Source link Frontier offers $ 250 million reverse breakage fee if Spirit merger is blocked

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