Frontier uses $250 M reverse break up cost if Spirit merger is obstructed

Frontier Airlines’ moms and dad business on Thursday stated it would pay a $250 million reverse break up cost to Spirit Airlines if regulators do not authorize the prepared mix of the 2 discount rate providers for antitrust factors, an effort focused on persuading financiers to authorize the offer next week as competing JetBlue Airways shops Spirit outright.

“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 stated in a news release.

New York- based JetBlue used $33 a share, or $3.6 billion money for Spirit, in April, above the $2.9 billion cash-and-stock offer that Spirit and Frontier revealed in February.

Spirit’s board turned down JetBlue’s advances, and JetBlue last month made a tender deal of $30 a share and has actually advised Spirit investors to vote versus the offer.

Spirit stated a handle JetBlue would not likely be authorized by regulators. JetBlue’s deal consists of a $200 million reverse break up cost if regulators do not authorize the acquisition.

On Tuesday, proxy advisory company Institutional Shareholder Services encouraged Spirit investors to vote versus the Frontier offer, raising issues about the absence of a reverse termination cost.

“Spirit’s Board only went back to Frontier under pressure, when it became increasingly clear their shareholders would decisively reject the Spirit Board’s flawed process and Frontier’s inferior transaction,” JetBlue stated in a declaration Thursday

“The addition of a reverse termination fee in the face of a likely defeat is simply an acknowledgement that the regulatory profiles and timelines of both deals are indeed similar,” it included.

Spirit’s investor conference is set for June 10