Frontier Airlines and Spirit Airlines announce modified merger agreement

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Frontier Airlines and Spirit Airlines announce modified merger agreement
Source: Spirit Airlines
June 03, 2022

$250 million reverse write-off fee offers increased shareholder protections


Spirit Airlines, Inc. ("Spirit" or the "Company") (NYSE: SAVE ) and Frontier Group Holdings, Inc. ("Frontier") (NASDAQ : ULCC ), the parent company of Frontier Airlines, Inc., today announced a amendment to its previously announced merger agreement dated February 5, 2022.

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 that the combination is not consumed. for antitrust reasons.

William A. Franke, Chairman of the Board of Directors of Frontier and Managing Partner of Indigo Partners, Frontier's majority shareholder, said, "We continue to believe in the strategic logic of a combination of Spirit and Frontier, bringing together two complementary businesses to create The "Most competitive ultra-low fare airline in the United States. In our belief that regulators will view this combination as pro-competitive, we have agreed to institute a reverse termination fee. We look forward to bringing these two carriers together and providing benefits to all parties." interested."

Ted Christie, Chairman and CEO of Spirit, said, "Since announcing our transaction with Frontier, we have had extensive and constructive discussions with our shareholders, who have expressed support for the strategic logic of our combination but a desire for additional protections for shareholders. After discussing this feedback with Frontier's 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 national carrier with ultra-low fares to compete against the dominant 'Big Four' carriers and other high-cost carriers," said Barry Biffle , Frontier's president and chief executive officer. . "We will continue to work closely with the Spirit team to successfully complete the transaction and deliver greater value to all of our shareholders."

"The combination of a higher reverse termination fee and a much higher probability of closing a Frontier merger provides substantially greater regulatory protection for Spirit shareholders than JetBlue's proposed transaction," said Mac Gardner, chairman of the board of directors. from Spirit. "We look forward to closing the transaction with Frontier and giving Spirit shareholders the opportunity to benefit from the recovery from the pandemic and share in approximately $500 million in annual net synergies."

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