JetBlue Airways Corporation (NASDAQ: JBLU) has no plans of giving up on Spirit Airlines Inc (NYSE: SAVE). On Monday, it sweetened its proposal to buy the ultra-low-cost air carrier to $31.50 a share.
JetBlue Airways raised reverse breakup fee
JetBlue says it’s now willing to pay $350 million in reverse breakup fee if the deal fails due to antitrust reasons. The announcement comes weeks after the Miramar-based airline rejected its offer citing little probability of approval from the regulators.
The Nasdaq-listed company had launched a hostile takeover bid to acquire Spirit for $30 a share in May, agreeing originally to a $200 million reverse breakup fee.
On top of that, the revised proposal offers a prepayment of $1.50 per share as cash dividend to Spirit shareholders if they vote against the competing bid from Frontier Airlines on June 10th. SAVE is up more than 6.0% on Monday.
CEO Robin Hayes’ remarks on the enhanced offer
Unlike many, CEO Robin Hayes is convinced that JetBlue Airways will win antitrust approval to buy Spirit Airlines. Explaining why this morning on CNBC’s “Squawk Box”, he said:
Firstly, JetBlue effect is more than three times effective at lowering fares than an ultra-low-cost carrier. Secondly, we’ll divest every Spirit slot and gate in the four Northeast airports to enable ultra-low-cost carrier competition to continue to thrive. So, yes, this can get done.’
The chief executive also reiterated that JetBlue “clearly” has a superior offer. Shares of the 1998 founded air carrier are up more than 2.0% on Monday.
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