What happened
Shares of the discount air carrier Spirit Airlines (SAVE 2.52%) were rising today after JetBlue Airways increased its offer to buy Spirit yesterday.
The airline stock was up by 8.1% as of 3:16 p.m. ET.
So what
JetBlue had already proposed an offer to buy Spirit, but the company improved on its proposal yesterday by offering $33.50 per share in cash — $2.00 per share higher than an offer from earlier in the month.
Image source: Getty Images.
JetBlue also included a previous commitment of a $350 million reverse break-up fee and an accelerated prepayment of $1.50 per share.
“Our previous proposal was met with an extremely positive reaction from Spirit stockholders, and we believe they will be even more pleased with these improved terms,” JetBlue’s CEO Robin Hayes said in a press release.
JetBlue’s new offer is aimed at convincing Spirit to choose its deal over Frontier Airlines‘ bid to buy Spirit. JetBlue said that its latest offer is a nearly 68% premium to the implied value of the Frontier proposal.
Now what
With its stock price down 31% over the past year, today’s share-price pop was certainly a welcomed change. And with the airliner fielding bids from both Frontier and JetBlue right now, Spirit shareholders should continue to keep a close eye on any developments about a potential deal.
Spirit Airlines’ management said that it will decide on the new proposal from JetBlue by June 30.
