(Reuters) -JetBlue Airways Corp on Monday improved its offer for smaller rival Spirit Airlines Inc in an attempt to outstrip competition in the race to buy the low-cost carrier.
Shares of Spirit jumped 6.2% to $22 premarket.
Under JetBlue’s new terms, Spirit shareholders will get $31.50 per share in cash, comprising $30 at deal close and prepayment of $1.50 from a raised reverse break-up fee. Its earlier offer was for $30 per share.
The move comes days before a June 10 shareholder vote on a competing offer from Frontier Group Holdings Inc.
Spirit had rejected JetBlue’s offer last month saying it had a low likelihood of winning approval from government regulators.
On Monday, JetBlue raised its reverse break-up fee by $150 million to $350 million, which is payable to Spirit shareholders in case the deal falls through due to antitrust reasons.
Frontier had agreed to pay $250 million in break-up fees.
Last week, proxy advisory firm Glass Lewis recommended that Spirit Airlines investors approve the deal with Frontier Group after another proxy firm, Institutional Shareholder Services Inc, advised against it.
(Reporting by Aishwarya Nair in Bengaluru; Editing by Devika Syamnath)