Keen to secure its $2.9 billion acquisition of Spirit Airlines, Frontier Airlines is determined to not let anything come in its way of creating the fifth-largest U.S. airline. JetBlue, for its part, is waiting in the wings. Over to the regulators.
Frontier Group Holdings Inc has agreed to pay a break-up fee of $250 million in a bid to secure its acquisition of Spirit Airlines Inc, the companies said on Thursday.
The sweetening of the terms comes after proxy advisory firm Institutional Shareholder Services Inc (ISS) urged Spirit shareholders to vote against the deal with Frontier, in part because Spirit failed to negotiate a break-up fee should U.S. antitrust regulators shoot down their deal.
The announcement confirms a Reuters exclusive earlier in the day that Frontier had agreed to pay a reverse termination fee to Spirit if the deal falls apart.
“Given our conviction that regulators will find this combination to be pro-competitive, we have agreed to institute a reverse termination fee,” Chair of Frontier’s Board of Directors William Franke said.
Frontier and Spirit Airlines’s potential $2.9 billion tie-up would create the fifth-largest U.S. airline, and could likely tighten competition against traditional carriers.
JetBlue Airways Corp is trying to gatecrash the deal with a hostile $3.3 billion offer for Spirit that the latter has rejected, arguing regulators will not greenlight it unless JetBlue makes more concessions.
(Reporting by Greg Roumeliotis and Anirban Sen in New York; Additional reporting by Radhikaa Anilkumar; Editing by Chris Reese and Sherry Jacob-Phillips)
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November 16, 2022Dallas-Fort Worth, TX and Online Learn More Now