Spirit and Frontier Amend Merger Agreement

Spirit Frontier Amend Merger Agreement

Spirit and Frontier Amend Merger Agreement

Spirit Airlines and Frontier Group Holdings, Inc., parent company of Frontier Airlines, today announced an amendment to their previously announced merger agreement.

Under the terms of the amended merger agreement, which has been unanimously approved by the boards of directors of both companies, 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.

“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,” said Ted Christie, President and CEO of Spirit. “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.”

“We continue to be excited about the combination with Spirit, which will create a true nationwide ultra-low fare airline to compete against the dominant ‘Big Four’ carriers and other high-cost airlines,” said Barry Biffle, President and CEO of Frontier. “We will continue to work closely with the Spirit team to successfully complete the transaction and deliver enhanced value to all of our stakeholders.”

The announcement comes as JetBlue is also looking to buy Spirit, and has recently upped the pressure on shareholders. Following the amended agreement between Spirit and Frontier, JetBlue also made an announcement.

“Today’s announcement demonstrates why, in their shareholders’ best interest, they should negotiate with us in good faith – which, 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.”

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