The Washington PostDemocracy Dies in Darkness

Frontier raises offer for Spirit Airlines

An employee assists a traveler at a Spirit Airlines check-in counter at Oakland International Airport this week. (David Paul Morris/Bloomberg)

Frontier Airlines on Friday added more cash and a larger breakup fee to its offer to buy Spirit Airlines, and the Spirit board repeated its preference for Frontier over a rival bid by JetBlue Airways.

Frontier added $2 per share to its previous offer, boosting it to $4.13 in cash plus 1.9126 shares of Frontier for each Spirit share.

The Denver-based airline also raised the amount it would pay Miramar, Fla.-based Spirit if antitrust regulators stop the deal — from $250 million to $350 million — matching JetBlue’s proposed breakup fee.

Spirit said that, given the sweetened terms, its board reiterated its unanimous recommendation that shareholders approve the Frontier offer at a special meeting next Thursday. The move comes about two weeks after Spirit’s board delayed a meeting to vote on a proposed Frontier merger.

JetBlue sweetens its offer for Spirit Airlines — again

JetBlue said its proposal remains better than Frontier’s with a higher value, more cash, “more certainty, and more regulatory protections.”

Frontier’s move was the latest gambit in a fight between Frontier and JetBlue to see who gets the nation’s largest discount airline. JetBlue sweetened its offer for Spirit Airlines on Monday with a revised deal that would pay shareholders $33.50 a share.

Spirit’s board has previously shunned JetBlue’s overtures, saying federal regulators were unlikely to approve a merger between the two. The carrier has sought to move forward with plans to merge with Frontier Airlines.

Spirit’s board has indicated it believes a deal with Frontier would have a better chance of being approved by federal regulators.

Spirit Airlines urges shareholders to reject JetBlue’s takeover bid

Industry analysts have also suggested a merger between Spirit and Frontier could have a better chance of approval because the Justice Department could see the combination of two ultra-low-cost carriers as a stronger challenge to American Airlines, Delta Air Lines, United Airlines and Southwest Airlines, which dominate the industry.

Frontier and Spirit announced plans in February to merge in a deal they said would also bring cheaper fares and service to smaller cities. In April, JetBlue announced an unsolicited cash bid to buy Spirit.

Either combination, if allowed to move forward, would create the fifth-largest U.S. carrier.