Shares of Spirit Airlines Inc. slid more than 7% in premarket trading Monday after the low-cost carrier agreed to a sweetened tie-up with rival Frontier Group Holdings Inc. and once again spurned an increased offer from JetBlue Airways Corp..
Spirit late Friday said Frontier’s new offer, which added another $2 a share in cash and raised its proposed breakup fee to $350 million, matching what JetBlue has offered, is superior to the all-cash bid from JetBlue, which last week nudged up its cash offer by $2 to $33.50 a share.
Based on Friday’s closing prices, the revised Frontier bid values Spirit at about $24.29 a share, with the consideration mostly in stock.
Spirit’s shareholders are slated to vote on whether to accept the revised Frontier deal at a special meeting on Thursday. Influential proxy advisory firm Institutional Shareholder Services Inc. said it now recommends Spirit investors approve the deal, reversing its prior position.
Spirit shares, which closed Friday at $24.52, were recently changing hands at $22.70, down 7.4%, in premarket trading, while shares of Frontier and JetBlue were inactive.
