sweetened its takeover offer for Spirit to $33.50 per share - up $2 - as it sought to convince Spirit's board to agree to its deal. At Frontier's closing price on Friday, its offer is worth $24.29 in stock and cash.Register now for FREE unlimited access to Reuters.comFrontier stock rose 6.6% on Friday to close $10.54, while Spirit was up 2.9% to $24.52. JetBlue shares gained 5.8% to close at $8.62.
The move is the latest salvo in a tussle to create the fifth-largest U.S. airline, helping the buyer compete with larger legacy players at a time when the industry faces labor and aircraft shortages. Spirit's board said on Friday that based on the improved offer from Frontier it "reiterates its unanimous recommendation that Spirit stockholders vote" in favor of the merger.Frontier is boosting the per-share cash to $4.13 - up $2 - in addition to the previously announced 1.9126 shares of Frontier per Spirit share. Frontier has also agreed that $2.22 per share will be prepaid to Spirit stockholders as a cash dividend following approval of the transaction.
Frontier also has increased its reverse termination fee to $350 million to Spirit if the deal is not completed for antitrust reasons. Spirit’s board had previously rejected the JetBlue offer, arguing that U.S. antitrust regulators would not approve a tie- up with JetBlue and noting that JetBlue refused to abandon its alliance with American AirlinesThe Justice Department filed an antitrust lawsuit against American and JetBlue in September seeking to end the alliance, saying it would lead to higher fares in busy airports in the U.S. Northeast.