Frontier Airlines Announces a “Break Up” Fee if Merger with Spirit Airlines is Unsuccessful
Jun 3, 2022 By MarketDepth
Frontier Airlines’ parent company, Frontier Group Holdings Inc. (NASDAQ: ULCC), announced that it would pay a USD250 Million reverse breakup fee to Spirit Airlines in the case that regulators don’t approve its merger. The move comes as the carrier strives to beat out rival JetBlue and convince investors to approve the deal as early as next week.
“The combination of a higher reverse termination fee and a much greater likelihood to close in a Frontier merger provides substantially more regulatory protection for Spirit stockholders than the transaction proposed by JetBlue.”Mac Gardner, Spirit’s chairman said in a news release
In April, JetBlue offered to acquire Spirit for USD33 a share, or USD3.6 Billion cash. More than the USD2.9 Billion cash-and-stock deal that Spirit and Frontier shared in February.
“Since announcing our transaction with Frontier, we have had extensive constructive conversations with our stockholders, who have expressed support for the strategic rationale of our combination but a desire for additional stockholder protections. After discussing this feedback with the Frontier Board and management team, we have agreed to amend the merger agreement. We look forward to closing the transaction and bringing more ultra-low fares to more people in more places.”Ted Christie, Spirit Airlines CEO
There is a Spirit shareholder meeting scheduled for June 10.