JetBlue Airways Corp on Monday improved its offer for smaller rival Spirit Airlines Inc in an attempt to outstrip competition in the race to buy the low-cost carrier.
Shares of Spirit jumped 6.2% to $22 premarket.
Under JetBlue’s new terms, Spirit shareholders will get $31.50 per share in cash, comprising $30 at deal close and prepayment of $1.50 from a raised reverse break-up fee. Its earlier offer was for $30 per share.
The move comes days before a June 10 shareholder vote on a competing offer from Frontier Group Holdings Inc.
Spirit had rejected JetBlue’s offer last month saying it had a low likelihood of winning approval from government regulators.
On Monday, JetBlue raised its reverse break-up fee by $150 million to $350 million, which is payable to Spirit shareholders in case the deal falls through due to antitrust reasons.
Frontier had agreed to pay $250 million in break-up fees.
Last week, proxy advisory firm Glass Lewis recommended that Spirit Airlines investors approve the deal with Frontier Group after another proxy firm, Institutional Shareholder Services Inc, advised against it.
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