Just added is a condition that Frontier would pay a reverse termination fee of $250 million, or $2.23 per share, to Spirit in the unlikely event the combination is not consummated for antitrust reasons.
William A. Franke, the Chair of Frontier's Board of Directors and the managing partner of Indigo Partners, Frontier's majority shareholder, said, "We continue to believe in the strategic rationale of a combined Spirit and Frontier, which brings together two complementary businesses to create America's most competitive ultra-low fare airline. Given our conviction that regulators will find this combination to be pro-competitive, we have agreed to institute a reverse termination fee. We look forward to bringing these two companies together and delivering on the benefits for all stakeholders."
Ted Christie, President and CEO of Spirit, said, "Since announcing our transaction with Frontier, we have had extensive constructive conversations with our stockholders, who have expressed support for the strategic rationale of our combination but a desire for additional stockholder protections. After discussing this feedback with the Frontier Board and management team, we have agreed to amend the merger agreement. We look forward to closing the transaction and bringing more ultra-low fares to more people in more places."
Spirit has employed a firm more used to lobbying politicians to lobby shareholders to accept the Frontier deal, rather than the rival and way more lucrative offer from the New York hometown airline JetBlue.
JetBlue issued a statement in which it blamed conflict amoung members of Spirit's board for the way they continue to prompote a deal against the best interests of shareholders. "yet again, they have failed to do. Spirit’s Board only went back to Frontier under pressure, when it became increasingly clear their shareholders would decisively reject the Spirit Board’s flawed process and Frontier’s inferior transaction.
The addition of a reverse termination fee in the face of a likely defeat is simply an acknowledgement that the regulatory profiles and timelines of both deals are indeed similar. Spirit had already admitted that its own prior unreasonably optimistic projections of receiving approval this year were in fact not accurate. Experts agree both transactions will receive the same level of scrutiny.
JetBlue will review and assess the revised terms of the amended merger agreement once it has been made available. We believe we have put forward a clearly superior offer and remain prepared to negotiate in good faith a consensual transaction at $33, subject to receiving necessary diligence. We urge Spirit shareholders to continue to let the Spirit Board know they want an open, fair process, providing us a level playing field and full access to the same information available to Frontier. There is still time for the Spirit Board to do the right thing for their shareholders."
As this take-over battle continues the reputation of all three firms is taking a knocking, many of JetBlue's own management are against the propsotion to take over Spirit. A top level leader in another of Indigo Partners airlines has said the Frontier / Spirit merger will not survive regulatiory investigation and has already put a strain on future development for the rest of the group.
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