Low-cost carrier Frontier Group Holdings Inc has declined to further raise its bid for takeover target Spirit Airlines Inc, potentially drawing curtains on its months-long bidding war with JetBlue Airways Corp.
Spirit signed a cash-and-stock deal with rival Frontier in February to form a new no-frills airline and compete against big national carriers. In April, JetBlue jumped into the fray with an all-cash offer.
Since then, JetBlue and Frontier have been fighting to seal a deal, which would expand their domestic footprints and create the fifth largest U.S. airline.
In a letter to Spirit, Frontier Chief Executive Barry Biffle said the Florida-based ultra-low-cost carrier should consider last month’s revised merger agreement as its “last, best and final offer.”
He also expressed his company’s willingness to waive its right to match JetBlue’s latest offer.
Under the revised terms, Frontier agreed to bump up the cash component of the deal by $2 per share to $4.13 per share. The Denver-based carrier also increased its reverse termination fee to Spirit by $100 million to $350 million.
Frontier’s cash-and-stock offer stood at $24.69 per share as of Friday’s close.
JetBlue, however, responded with a higher bid, raising the overall value of its offer to $3.7 billion in cash.
“In line with our recent discussions, Frontier does not intend to propose any further modifications to the financial terms of the Merger Agreement,” Biffle said in his letter.
The bidding war has repeatedly forced Spirit to delay a shareholder vote on its merger deal with Frontier.
The shareholder vote is now scheduled for Friday. Sources have told Reuters that Spirit is negotiating with JetBlue to finalize a deal as it faces opposition from shareholders to the Frontier deal.
Biffle, however, asked Spirit to defer the vote until July 27, citing the need for more time to gather sufficient proxy support.
“We still remain very far from obtaining approval from Spirit stockholders based on the proxy data we received as of July 8,” he said, urging Spirit’s board to reiterate its support for a merger deal with Frontier.
JetBlue declined to comment.
