Frontier Group’s latest offer for Spirit Airlines has led the consulting firm Institutional Shareholder Services Inc (ISS) to change its mind about an agreement.
ISS now urges shareholders of Spirit Airlines to vote in favor of a proposed merger with Frontier’s parent company.
That’s a change from a month ago when the consulting firm asked Spirit shareholders to reject Frontier’s offer, saying that JetBlue̵[ads1]7;s competing offer of $ 30 per share is superior from an economic point of view.
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Since the beginning of April, Spirit has been the subject of a bidding war between Frontier and JetBlue Airways Corp.
THE SPIRIT AIRLINES RACE: JETBLUE, FRONTIER JOCKEY FOR WIN
“On the balance sheet, support for the merger with Frontier on the revised terms is justified,” the proxy consulting firm said in a report published late Friday.
Spirit Airlines said Friday that Frontier accepted its offer, raising its cash offer by $ 2 per share and urging shareholders to support a merger agreement with Frontier at a meeting next week.
JetBlue had sweetened its offer for Spirit by $ 2 to $ 33.50 per share in cash, earlier this month.
JETBLUE UPS ANTE FOR SPIRIT
A vote by Spirit shareholders on the merger with Frontier is set for 30 June.
|SAVE||SPIRIT AIRLINES INC.||24.54||+0.71||+2.98%|
|ULCC||FRONTIER GROUP HOLDINGS||10.54||+0.65||+6.57%|
ISS said that the current offer from Frontier corresponds to the $ 2.00 increase in JetBlue’s offer price and also provides a higher down payment of $ 2.22 per share compared to $ 1.50 per share from JetBlue.
JETBLUE OFFERS TO BUY SPIRIT AIRLINES FOR ABOUT $ 3.6 BILLION CASH
Frontier also conversely increased Spirit’s termination fee by $ 100 million to $ 350 million.
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Spirit has repeatedly rejected JetBlue’s offer of concerns about gaining approval from US regulators.
Reuters contributed to this report.