JetBlue’s improved proposal includes a previous commitment of a $350 million reverse break-up fee and accelerated prepayment for 1.5 cents per share.
The new offer submission comes after Spirit convinced them that their partnership would create an airline with a true national competition, which benefits all parties involved.
- Stronger divestiture commitment:
JetBlue has increased its commitment to divestitures for regulatory approval. The company will now be willing to sell up until a material adverse effect on the combined airline would occur, which is more than what was requested from Frontier earlier this year when they agreed only if it were an action that could potentially hurt their expected benefits out of northeast alliance contracts with other airlines.
- The increased price of $33.50 per Spirit share:
JetBlue’s proposal offers a superior all-cash premium to Spirit stockholders. The increased price of $33.50 per share represents an improvement in value by 6%, compared with their previous offer on June 6th, and it’s more than double what you could get if your shares were purchased at today’s rates.
- Reverse breakup fee:
JetBlue has agreed to offer a reverse break-up fee worth $350 million, or 3.2 cents per share for Spirit’s shares, if the merger is blocked because of Antitrust reasons – an increase from their original offer, which was 1%.
- Accelerated prepayment of $1.50 per share:
Spirit’s shareholders will receive a total of $33.5 million in cash and stock after the merger, with one dollar per share worth about 31 cents at today’s prices (although it could be more or less depending on market fluctuations).
- Divestiture commitment in New York and Boston:
JetBlue is offering to divest itself of assets in New York and Boston, so as a result, they will not be increasing their presence at those airports. In return for this proposal, the U Department Of Justice has agreed that Jet Blue’s deal passed regulatory scrutiny.
JetBlue and Spirit have been discussing a potential merger for some time now. After further due diligence, it’s clear that this would create an airline with true national competitors among the Big Four air carriers and provide value to all of their stakeholders.”
JetBlue has made several improvements to its original proposal that will please Spirit stockholders, including additional regulatory commitments reflecting our confidence in obtaining antitrust approval. We look forward to moving quickly towards an agreement bringing even more value for shareholders while welcoming Crew Members from other airlines into the Jet blue family.
JetBlue sent a letter to the Board of Directors of Spirit containing its improved proposal.
The full letter follows:
Dear Members of the Board:
JetBlue Airways Corporation is excited to announce that it has reached an agreement with Spirit Airlines. The proposed merger will create a true national competitor, delivering low fares and a great customer experience while creating more opportunities for crew members and shareholders alike.
To maximize the value of Spirit, we have submitted an improved proposal that is responsive and satisfactory. Our new offer will be for all outstanding shares plus some additional terms you might find interesting such as increased execution certainty.
Terms of Improved Proposal:
Our team’s improved proposal offers Spirit shareholders more than the deal with Frontier.
- We are confident that our shares would be valuable to any potential buyer. We had increased the price by $33, or 6%, an improvement over last month’s proposal when you bought it at just under 20$. The total value now sits around 3 billion dollars-not, including Spirit’s enterprise(valued at 7%).
Stronger regulations include:
- The DOJ has conditionally approved our proposal, which will divest all Spirit assets located in New York and Boston not to increase their presence at Fort Lauderdale. In addition, we are offering up to a material adverse effect on the combined JetBlue-Spirit with an exception for actions that would be reasonably likely to impact anticipated benefits under NEA’s northeast alliance materially; this is significantly more than what was committed by Frontier when they sold off certain routes last year.
- The companies agreed to provide a $350 million reverse breakup fee if Antitrust regulators block the merger. That’s more than double what they had originally planned, and it will be paid out over time as opposed to all at once, which means smaller payments for now but could increase later on depending on how things go with this transaction.
- We all know how expensive it can be to break up with a lover–especially if they’re your business partner. Spirit Aeronautics has agreed not just to send $186 million upfront as soon as voting rights change hands, but they’ll do so without waiting for the merger agreement’s termination period.
- Spirit stockholders would receive a total aggregate consideration of $33.50 per share in cash, composed entirely of the closing and prepayment rate that is paid upfront at this time for 1/3rd value.
We’ve wanted to work with you for a long time and now is the perfect opportunity. With our improved proposal that offers more value than any other alternative on tap at this moment in time – combined with some strong commitments from regulatory bodies across North America- we believe it will be an easy decision when taken together as one package.
JetBlue’s proposal is better for customers and their team members because it offers low fares and great service throughout the country. The airline also has an innovative approach to working with employees, including offering higher pay packages than either Spirit or Frontier, which will provide exciting career development opportunities, among other things.
We’ve spent a lot of time and effort evaluating Spirit, but we believe our Improved Proposal is the best way to move forward. To get back on track with their business operations, they need definitive documentation immediately.
We are more than happy with your company’s proposal, but we have the power to stop this transaction if it is not what our clients need.
We will continue fighting and voting no on June 30th when you decide between two contracts; don’t let that happen!
Sincerely,
/s/ Robin Hayes
Chief Executive Officer
Advisors
Goldman Sachs & Co. LLC serves JetBlue’s financial advisor, and Shearman & Sterling LLP serves JetBlue’s legal advisor.
Forward-Looking Statements:
Management expects that their forward-looking statements within the meaning of Section 27A and 21E will qualify for Safe Harborship as they identify what we expect future events to be. These words represent management’s beliefs about those matters, which means there has been no assurance created since these items don’t give clear guidance on how things operate or perform in reality, so until further notice, this cannot happen.
JetBlue Airways Corporation (“Jet Blue”) and Spirit Airlines have announced that they will be partner carriers for one another’s flights in response to increased demand during the coronavirus pandemic. The partnership was made possible by an agreement between both companies which prevents either from increasing prices without consultation with the other party, who also controls restroom access at critical points throughout their network; this decision has been seen as progressive given how hard it can sometimes seem like just getting through each day when there are always more demands than resources available.
JetBlue has set out the conditions for completing a possible business combination transaction. These include receiving required stockholder and regulatory approvals and their expectations for success in financing such a deal with debt or other arrangements before completing it on all fronts. They believe this outcome will happen largely due to JetLights’ strong reputation among investors following three-quarters of positive returns despite recent dips.
JetBlue is acquiring Spirit in a possible bid to boost its growth. But there are many risks involved with this transaction, including the fact that synergies and operating efficiency may not be achieved as planned, if at all; integrating two airlines can also cause problems like increased costs or disruption of relationships between employees (and customers).
We cannot guarantee that forward-looking statements will prove accurate or true. You should not rely on these statements as the future may never happen, and there is always risk in investing your money.
You can be sure that whatever the future has in store for us, it will always have one thing: our undying commitment to bettering your day-to-day life with quality products and services at competitive prices.
Additional Important Information and Where to Find It
JetBlue Airways Corporation and its wholly-owned subsidiary, Sundown Acquisition Corp., have commenced a tender offer for all outstanding shares of common stock in Spirit Airlines. This press release is an informational piece concerning the terms offered by these two companies, which include information on when elections must be made, or changes can occur with your holdings while also providing links where more detail may exist if needed.
JetBlue has filed a definitive proxy statement with the SEC and is using this card to solicit opposition from shareholders. The company plans on mailing out these papers at some point in preparation for their meeting next month, where they will be voting whether or not to approve Spirit’s merger with Frontier Group Holding Incorporated (Frontier).
There is a very important document that Spirit shareholders need to review. The definitive proxy statement and all other relevant documents filed with the SEC will contain valuable information, so be sure not to miss out on these.
Participants in the Solicitation
The directors and executives at JetBlue may be deemed participants in the solicitation of proxies from holders of Spirit common stock. More information on these parties can be found in their definitive proxy statement, which will come out before voting begins for this important election.
About JetBlue:
JetBlue takes you from city to country with its low fares and award-winning service. With routes that span the whole United States, Latin America, and Caribbean Europe, flights are available for just $149* this year! Go on any one of our EasyJet colored planes today.
The airline has been offering customers an inexpensive way into new destinations since 2005, when they first started flying out of New York City’s John F Kennedy International Airport – now also its home base before expanding across other locations, including Boston, MA; Fort Lauderdale Hollywood FL; Los Angeles CA.
- The agreement to merge Top Gun Acquisition Corp and Frontier Group has been signed, paving the way for one of Canada’s most valuable healthcare companies. The merger is set to be completed in Q3 2022 following regulatory approval, which the HealthCanadier Board recently granted with an implied value of $19 above cost.
- This analysis shows that as of February 4, 2022 (the day before Spirit’s merger with Frontier), there was a $4 billion premium left to bemaid the shares after considering all other factors. If we assume fully diluted share outstanding is approximately 109 million and 7% ($700M), then this means 930K more shares would have been bought at 25c/share, which accounts for about one out five shares in an already flooded market.
