Sweetened Proposal by JetBlue : JetBlue is willing to pay $350 million in reverse breakup fee if the deal fails due to antitrust reasons .
No plans of giving up on Spirit Airlines !
In a heightened effort , JetBlue on Monday , sweetened its proposal to buy the ultra-low-cost air carrier to $31.50 a share , details of Proposal to Spirit stockholders are as below:
- An enhanced reverse break-up fee of $350 million, or $3.20 per Spirit share, payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons, representing:
- An increase of $150 million, or $1.37 per Spirit share, to the reverse break-up fee JetBlue previously offered to pay; and
- Approximately 15% of Spirit’s unaffected share price, and approximately 78% of the original premium offered by Frontier.
Vote against the Frontier Airlines bid !
The revised proposal also 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.
Jet Blue releases to media,
- A prepayment of a portion of the reverse break-up fee in the amount of $1.50 per share in cash, payable to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue.
-
- The prepayment would be structured as a cash dividend to Spirit stockholders of $1.50 per share (approximately $164 million), representing a portion of our revised $3.20 per share reverse break-up fee, fully-funded by JetBlue to Spirit, that would not be reimbursable if the transaction is terminated for antitrust reasons.
- In the unlikely event the reverse break-up fee is payable, the upfront special dividend would reduce the amount to be paid to Spirit at the time of the termination of the merger agreement to approximately $186 million ($1.70 per share).
- In a negotiated transaction Spirit stockholders would receive total aggregate consideration of $31.50 per share in cash, comprised of $30 per share in cash at the closing of the transaction and the prepayment of $1.50 per share in cash of the reverse break-up fee.
You may like to read...
A Comparision with Frontier transaction !
- More value and more certainty for Spirit stockholders with our all-cash offer. JetBlue offers Spirit stockholders aggregate consideration of $31.50 per share in cash, representing a 51% premium to the value of the Frontier transaction as of June 3, 2022, a 52% premium to Spirit’s latest closing price, and a 45% premium to Spirit’s unaffected share price.
- More value upfront. Our $1.50 per share prepayment of a portion of the reverse break-up fee, payable promptly following Spirit stockholder approval of our transaction, allows Spirit stockholders to receive some cash sooner, irrespective of the ultimate outcome of the transaction.
- More regulatory protections through our significant divestiture commitments and a $350 million reverse break-up fee, $100 million greater than the amount being offered by Frontier.
JetBlue has sent a letter to the Board of Directors of Spirit containing its improved proposal . In the letter, JetBlue CEO Robin Hayes stated:
“Combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for crew members, and more value for stockholders."
"The key features of our Improved Proposal – the up-front cash payment and increased reverse break-up fee – reflect the seriousness of our commitment and underscore our confidence in completing this transaction."
"Additionally, given the similar regulatory risks of the two transactions and the increased reverse break-up fee we are prepared to provide, we believe our Improved Proposal remains a Superior Proposal by any measure.”
Source : JetBlue
Previous Developments...
