Spirit Announces Amended Frontier Agreement

Cubbie_n_Vegas from Las Vegas, USA, CC BY 2.0 , via Wikimedia Commons

LONDON – At the back-end of last week, Spirit Airlines announced another amendment to its merger agreement with Frontier, in the wake of JetBlue amending their agreement a little earlier on in the week.

The Frontier Amendment…

Despite the latest amendment from JetBlue being strong, Spirit’s Board of Directors is still reiterating that they recommend Spirit Stockholders to proceed with the merger agreement from Frontier after the BoD had determined that JetBlue’s offer is not the superior agreement.

In its latest agreement, Frontier has increased its per-share cash to $4.13 that will be paid to Spirit’s stockholders, in addition to this, each stockholder will also receive the previously agreed 1.9126 of Frontier’s shares, per-share they have with Spirit.

As well as this, to fall in line with JetBlue’s latest offer, Frontier has also increased its reverse termination fee to $350 million, in the event that the merger is not consummated due to antitrust guidelines.

It has also been agreed that Frontier will prepay $2.22 per share to Spirit stockholders on a determined date as a cash dividend following the approval of the merger by Spirit’s stockholders.

Included in the latest amended agreement, it is also to be noted that the number of directors of the combined company will also change slightly. The directors to be named by Frontier will increase by one with Spirit’s director naming to be decreased by one.

Spirit’s BoD believes that the merger with Frontier offers a more competitive value than the JetBlue offer, as well as the Frontier merger is subject to less regulatory scrutiny, meaning that the merger with Frontier is much more likely, although is still subject to antitrust guidelines.

It is also worth mentioning that the pro forma value of Spirit’s shares under the revised amended terms with Frontier could hit $50 per share by 2024.

This coincides with the expected recovery of the North American airline industry and is more significant than JetBlue’s recent amended offer.

Commenting on the latest amendment with Frontier, Spirit’s President and Chief Executive Officer, Ted Christie, has said, “We are thrilled to announce the terms of Spirit’s amended agreement with Frontier, which includes nearly double the per-share cash consideration of our prior agreement with Frontier while still allowing stockholders to benefit from the economic upside of airline industry recovery.”

“As this recovery progresses and demand returns, the price of the combined airline’s stock is expected to exceed the per-share price of JetBlue’s fixed, all-cash offer. We urge stockholders to vote FOR the merger agreement with Frontier on the WHITE proxy card prior to the June 30 Special Meeting.”

Adding to Christie’s thoughts, Chairman of the Board at Spirit, Mac Gardner, also says, “The Spirit Board of Directors conducted a thoughtful and thorough process when considering the competing proposals, and after excessive discussions with Frontier and JetBlue, we firmly believe that a combination with Frontier continues to be in the best interests of the Company and our stockholders, especially given the increased per-share consideration and enhanced reverse termination fee.”

“A merger with Frontier poses a less regulatory risk on Spirit stockholders and increases competition in the industry for the benefit of consumers.”

“The Board is confident a merger with Frontier is the most financially and strategically compelling path forward for Spirit stockholders, with more certainty and the strongest likelihood of closing.”


Despite JetBlue’s very strong counter offers, it is clear from the comments of Spirit’s Leadership teams that the Frontier merger is still the best move forward for the company, and is expected to provide stockholders a more future-proofed business.

It will be interesting to see what the vote outcome is from the Special Meeting on June 30, but it seems more likely that Frontier will get the majority.

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