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JetBlue (JBLU) Ups Break-Up Fee in Bid for Spirit Airlines
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JetBlue Airways (JBLU - Free Report) continues to pursue its interest in acquiring Spirit Airlines (SAVE - Free Report) . Despite being turned down twice, JBLU has yet again submitted an “improved proposal” to SAVE’s board to acquire all of the latter’s outstanding shares. Following this, shares of JetBlue gained 2.1% at the close of business on Jun 6, while Spirit Airlines’ shares climbed 7%.
Per the improved proposal, JetBlue is offering to pay a reverse break-up fee of $350 million ($3.20 per Spirit Airlines share) in case the deal fails to materialize due to antitrust concerns. This is higher than its initial offer of a $200-million reverse break-up fee. It is also higher than Frontier Group Holdings’ (ULCC - Free Report) offer to pay a reverse termination fee of $250 million.
Further to this enhanced proposal, JetBlue said that it would prepay $1.50 per share in cash (approximately $164 million) of the reverse break-up fee as cash dividend to Spirit Airlines’ shareholders as soon as they vote in favor of the merger deal. With this, SAVE’s shareholders will receive $31.50 per share in cash, consisting of $30 per share in cash at the time of closing of the transaction and the prepayment of $1.50 per share of the reverse break-up fee.
In a letter to Spirit Airlines' team members, JetBlue said that the combination would create multiple jobs across their network that would offer higher pay and better benefits. The letter also emphasized JBLU’s no-furlough commitment, stating that the company has never furloughed any crew member or even sent a WARN Act notice in its 22-year history.
In a statement, Spirit Airlines confirmed the receipt of JetBlue’s updated proposal and said that the board will evaluate it.
JetBlue’s move to put forward an enhanced proposal to Spirit Airlines comes ahead of the latter’s shareholders’ meeting on Jun 10 where the Frontier offer will be put to vote.
Akin to JetBlue’s proposal, the deal with Frontier is also expected to offer enhanced benefits for Spirit Airlines’ team members, including better career opportunities and more stability. The Spirit Airlines-Frontier combination is expected to add 10,000 direct jobs and thousands of additional jobs for the companies’ business partners by 2026.
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JetBlue (JBLU) Ups Break-Up Fee in Bid for Spirit Airlines
JetBlue Airways (JBLU - Free Report) continues to pursue its interest in acquiring Spirit Airlines (SAVE - Free Report) . Despite being turned down twice, JBLU has yet again submitted an “improved proposal” to SAVE’s board to acquire all of the latter’s outstanding shares. Following this, shares of JetBlue gained 2.1% at the close of business on Jun 6, while Spirit Airlines’ shares climbed 7%.
Per the improved proposal, JetBlue is offering to pay a reverse break-up fee of $350 million ($3.20 per Spirit Airlines share) in case the deal fails to materialize due to antitrust concerns. This is higher than its initial offer of a $200-million reverse break-up fee. It is also higher than Frontier Group Holdings’ (ULCC - Free Report) offer to pay a reverse termination fee of $250 million.
Further to this enhanced proposal, JetBlue said that it would prepay $1.50 per share in cash (approximately $164 million) of the reverse break-up fee as cash dividend to Spirit Airlines’ shareholders as soon as they vote in favor of the merger deal. With this, SAVE’s shareholders will receive $31.50 per share in cash, consisting of $30 per share in cash at the time of closing of the transaction and the prepayment of $1.50 per share of the reverse break-up fee.
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In a letter to Spirit Airlines' team members, JetBlue said that the combination would create multiple jobs across their network that would offer higher pay and better benefits. The letter also emphasized JBLU’s no-furlough commitment, stating that the company has never furloughed any crew member or even sent a WARN Act notice in its 22-year history.
In a statement, Spirit Airlines confirmed the receipt of JetBlue’s updated proposal and said that the board will evaluate it.
JetBlue’s move to put forward an enhanced proposal to Spirit Airlines comes ahead of the latter’s shareholders’ meeting on Jun 10 where the Frontier offer will be put to vote.
Akin to JetBlue’s proposal, the deal with Frontier is also expected to offer enhanced benefits for Spirit Airlines’ team members, including better career opportunities and more stability. The Spirit Airlines-Frontier combination is expected to add 10,000 direct jobs and thousands of additional jobs for the companies’ business partners by 2026.
Each of the three stocks mentioned above carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.