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Spirit Airways (NYSE:SAVE) rose 5.2% after hours Monday after JetBlue (NASDAQ:JBLU) introduced it is modifying its supply for the airline, including a ticking payment and growing a proposed reverse breakup payment.
JetBlue mentioned it is conveying the new proposal to Spirit’s board and is urging Spirit shareholders to vote in opposition to Frontier’s “inferior” supply.
Within the new supply, JetBlue elevated accelerated prepayment to $2.50 per share, structured as a money dividend to Spirit shareholders “promptly” following a shareholder vote in favor of the deal.
Together with a reverse breakup payment raised to $400M (payable to Spirit if the deal is rejected for antitrust causes), a ticking payment would supply shareholders with a month-to-month prepayment of $0.10 per share between January 2023 and the consummation or termination of the deal.
That is an aggregated ticking payment of as much as $1.80 per share, with the primary $1.15 per share offsetting the reverse breakup payment or the merger consideration, JetBlue says.
“Spirit shareholders shouldn’t be misled by Spirit and Frontier’s rosy projections of a possible future inventory value, that are primarily based on extremely flawed assumptions that fail to account for the precise market situations, together with the necessity for pilot pay will increase and elevated gasoline prices,” JetBlue CEO Robin Hayes mentioned.
“The entrenched Spirit Board has authorised a revised deal that’s in the end higher for Frontier and its controlling shareholder than it’s for Spirit shareholders,” Hayes added.
Frontier Group Holdings (NASDAQ:ULCC) is up 1.6% after hours.
Spirit (SAVE) shares fell early Monday as administration backed a sweetened offer from Frontier (ULCC).
