Merger Arbitrage Mondays – JetBlue Wins Bidding War For Spirit Airlines

Merger activity increased significantly last week with eight new deals announced, three deals completed and one deal terminated. Four out of the eight deals announced last week were potential deals in the works. The bidding war for Spirit Airlines (SAVE) finally came to an end last week with Spirit terminating its deal with Frontier (ULCC) and agreeing to be acquired by JetBlue (JBLU). We wrote in detail about the bidding war for Spirit Airlines on June 13, 2022, in an article titled, “Merger Arbitrage Mondays – The Bidding War For Spirit Airlines Continues“. Ahead of the shareholder vote, Frontier had sweetened its offer for Spirit by increasing the cash and boosting the breakup fee it would have to pay if the deal was blocked by regulators. It also promised to pay part of the price instantly on receiving shareholder approval. JetBlue countered Frontier’s offer with a higher breakup fee, a bigger upfront payment and the addition of a ticking dividend-like payment that would start next year to counter uncertainty with respect to the amount of time it might take for the deal to be completed. JetBlue’s initial counter offer for Spirit Airlines on April 5, 2022 was for $33 per share....

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