New York's JetBlue has just submitted yet another improved proposal to the Board of Directors of Spirit to acquire all of the outstanding common stock of Spirit. The new offer offers Spirit stockholders demonstrably superior value, more regulatory protections, and the prepayment of a portion of cash consideration:
Enhanced reverse break-up fee: JetBlue would provide a $350 million ($3.20 per Spirit share1) reverse break-up fee, payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons. This represents an increase of $150 million, or $1.37 per Spirit share, to the reverse break-up fee JetBlue has previously offered to pay, and is $100 million greater than the amount being offer by Frontier.Accelerated prepayment of $1.50 per share: JetBlue would prepay $1.50 per share in cash (approximately $164 million) of the reverse break-up fee, structured as a cash dividend to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue.2Superior, all-cash premium: JetBlue’s proposal offers Spirit stockholders 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 of the reverse break-up fee.
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June 6, 2022
Dear Board of Directors:
On behalf of JetBlue Airways Corporation (“JetBlue”), we are submitting a further update to our previous proposals, dated March 29, 2022, and April 29, 2022, to acquire all of the outstanding common stock of Spirit Airlines, Inc. (“Spirit” and this letter, our “Improved Proposal”).
We remain fully committed to acquiring Spirit. After listening to your stockholders and reaffirming with our Board the significant benefits to all stakeholders of combining JetBlue and Spirit, we are pleased to submit this Improved Proposal, which we believe Spirit stockholders will welcome. We urge you to consider our Improved Proposal, which you are permitted to do under the Frontier Agreement3 and are required to do in the exercise of your fiduciary duties, and negotiate with us in good faith to reach a consensual transaction.
Terms of Improved Proposal
Our Improved Proposal offers Spirit stockholders:
When compared to the inferior Frontier transaction, our Improved Proposal offers:
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 Crewmembers and Team Members, and more value for stockholders. The key features of our Improved Proposal – the up-front cash payment and increased reverse break-up fee – are not an illusion. This offer reflects the seriousness of our commitment and underscores 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.
The amended terms of your merger agreement with Frontier are yet further evidence that your stockholders would have benefited had you engaged with us with in good faith at the outset. Clearly, Frontier only agreed to provide a reverse break-up fee and divestiture commitments because it was clear that your stockholders were going to vote down the inferior Frontier transaction. The addition of a reverse break-up fee one week before your stockholder vote is an acknowledgement that the regulatory profiles and likely timelines of both deals are in fact similar, something that both experts and many Spirit stockholders agree on by now.
Our Improved Proposal represents a compelling opportunity for your stockholders to receive a significant premium in cash, with greater value and certainty, and a higher reverse break-up fee than the inferior transaction with Frontier.
Accepting our Improved Proposal is in the best interests of your stockholders, and we urge you to immediately engage with us in good faith to finalize definitive documentation with JetBlue reflecting the terms of our Improved Proposal.
We look forward to hearing from you soon.
Sincerely,
Robin Hayes
Chief Executive Officer